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January 14, 2013 1

January 14, 2013 Vol. 17, No. 01

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 to exceed 2011 investments Inside DTI 1. DTI reopens HallONE Center 2. PEZA to meet 12-% growth targets Good News, Philippines! 1. PHL cited as investment choice 2. Electronics to rebound 3. BSP sees rise in FDIs MSME/OTOP News 1. Industry cluster program creates over 300 MSMEs 2. DTI offers business aid for product development on indigenous materials 3. MSMEs to benefit from PPP 4. Marikina exempts small businesses from tax

Business Alert 1. SEC warns public against investment frauds 2. DOST plans P400-M laboratory 3. DOST, UP launch Seeds-TBI 4. PHL sees more vibrant industry sector Consumer News 1. DTI cites products under mandatory certification 2. Toy cosmetics contain highly toxic mercury Features The DTI Bagwis Seal of Excellence ASEAN Watch 1. PHL grows popular as halal food market gateway 2. ASEAN-India FTA opens markets for Pinoy exporters Statwatch DTI Direct What’s New?


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Focus BOI to exceed 2011 investments

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he Board of Investments’ (BOI) approvals last year would have reached more than the 2011 actual haul. “We would be happy to go over P300B,” Department of Trade and Industry (DTI) Undersecretary for Trade and Investment Promotions Group (TIPG) Cristino L. Panlilio said. BOI Executive Director Lucita P. Reyes said the December approvals

would enable the agency to surpass the 2011 actual investments inflow of P360B. However, BOI’s P400-B target for 2012 could not be possibly met.

1. DTI reopens HallONE Center

The additional guidelines stipulate that entitlements to incentives shall be based on project’s net value added (NVA), job generation, multiplier effect, and measured capacity. To compute for job generation, which refers to the number of people employed by the project, the total annual wages paid over 300 days should be multiplied by the minimum daily wage of the region where the project is located. On the multiplier effect, which refers to the project’s forward and backward linkages, the project seeking incentives is required to have at least two industry linkages.

Issues in the mining and renewable energy projects hampered investments inflow last year. The BOI has experienced a slowdown in mining project registration since the government’s issuance of Executive Order (E.O.) 79, which stipulates the new mining policy in the country.

Measured capacity, the last criterion, is the estimated additional volume of production or service which the BOI determines to be desirable in each preferred investment area to supply the economy’s needs at reasonable prices.

In addition, amendments to the Mining Act have yet to be enacted by Congress.

To facilitate the investments’ inflow, the BOI has been pilot testing a more business-friendly investment application process on agribusiness, mass housing, and tourism projects.

Aside from the constraints in mining investments, the BOI has also implemented a stricter evaluation process in project registration for incentive purposes.

Inside DTI

Vol. 17, No. 012

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he Department of Trade and Industry (DTI) and the Center for International Trade Expositions and Missions (CITEM) have reopened its HallONE Center as a permanent showroom for worldclass Philippine export products, a venue for industry meetings and events, and a sourcing venue for local and foreign buyers. “The thought of having permanent exhibition halls for Philippine exports has hit me when I joined

The BOI has reduced the number of required data items from 52 to 14, the evaluation paper pages from 15 to two, and the processing period from 20 to five days.

government and started to visit different countries. I realized that Taiwan, South Korea, and Singapore have very big exhibition halls. I said that one day the Philippines should also revive the concept of an exhibition hall for its world-class products,” Department of Trade and Industry (DTI) Undersecretary for Trade and Investment Promotions Group (TIPG) Cristino L. Panlilio said.

Located at the International Trade Center on Roxas Boulevard in Pasay


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January 14, 2013 3

City, the facility will offer year-round services such as business matching and appointment scheduling, shipping, factory visits, export order-taking and shipping assistance, controlled and retail selling design clinics, seminars, and workshops. Panlilio said the hall will be leased for two straight months to different exporter associations of sectors like garments, housewares, furniture, jewelries, and electronics.

2. PEZA to meet 12-% growth targets

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he Philippine Economic Zone Authority (PEZA) is confident to have met its growth targets for exports, investments, and employment last year amid the improved business environment. “We expect to have achieved our growth target of 12-12-12 for investments, exports, and employment,” PEZA Promotions Group Head Elmer H. San Pascual said.

Despite the decline in electronic shipments in the third quarter of last year, PEZA said investment commitments still managed to grow as other sectors remained bullish.

Good News, Philippines! 1. PHL cited as investment choice

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he Philippine Trade and Investment Center (PTIC)Seoul said the Korea Economic Daily (KED) reported the Philippines as the investment destination of choice for Korean small and medium enterprises (SMEs). The report said Korean SMEs chose the Philippines because the average wage here at USD 300 a month was only half the wage in China. Filipinos’ English proficiency was another advantage.

“The idea is for them to get their invited domestic and foreign buyers,” he said.

For its first two-months of operation, HallONE will showcase furniture and home decors. It will also be a fashion gallery of the country’s tropical wear. The revived HallONE is designed by world renowned Budji Layug and architect Royal Pineda.

Among the exports that posted positive results were activated carbon, metal components, bananas, ignition wiring sets and other wiring sets used in vehicles, aircraft and ships, pineapple and pineapple products, tuna, and woodcraft and furniture. PEZA also noted the expansion trend in economic zones not only in electronics but also in other sectors. The Japanese led in terms of new investments made, followed by the Americans. The agency aggressively conducted marketing and investment missions overseas to attract more investors into the country. Data from the Korea Export Import (Exim) Bank showed that 69 Korean companies branched out in the Philippines in 2009, 74 in 2010, and 82 in 2011. In the first quarter of 2012, the number of new Korean companies in the Philippines increased to 22 from 19 in 2011. Among these new companies were Nurian International (garments), Iam (electronics), and Koren (electronics). (MAL 12/27)


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2. Electronics to rebound

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ew investments will lead the electronics industry to grow 5%-6% this year, the Semiconductors and Electronics Industry of the Philippines Inc. (SEIPI) said. The reason SEIPI remains bullish that the industry will grow is that it expects the impact of these new investments this year. SEIPI said the industry was likely to have a flat growth in 2012 because of the lingering effects of a slowdown in global demand.

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SEIPI is optimistic that a rebound is going to happen this year and that electronics will still comprise about half of the country’s total exports this year. The Philippine Exporters Confederation Inc. (Philexport) earlier said the recovery of electronics shipments, coupled with the robust services exports, would have fuelled an 11-% growth in total exports in 2012. Philexport President Sergio Ortiz-Luis expected electronics shipments to recover in the early part of the year. (MST 12/26)

3. BSP sees rise in FDIs

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he Bangko Sentral ng Pilipinas (BSP) has expressed optimism that foreign direct investments (FDIs) would increase in 2013, citing the country’s improving macroeconomic fundamentals and prospects of a credit rating upgrade. BSP Governor Diwa C. Guinigundo said the Board of

Investments (BOI) and the Philippine Economic Zone Authority (PEZA), the two agencies tasked with soliciting FDIs, reported to the BSP that many

MSME/OTOP News 1. Industry cluster program creates over 300 MSMEs

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total of 354 micro, small, and medium enterprises (MSMEs) were created through the National Industry Cluster Capacity Enhancement Project (NICCEP), a government program that clusters industries, the Department of Trade and Industry (DTI) reported. “After launching the NICCEP last May 2012, our regional and provincial offices have shown strong commitment in adopting the industry cluster approach to support the development of MSMEs in the country,” DTI Undersecretary for Regional Operations and Development Group (RODG) Merly M. Cruz

said.

foreign firms from various industries had signified their desire to put up operations in the country. Guinigundo said firms wanting to do business in the Philippines were engaged in power, electronics, and business process outsourcing (BPO). He attributed this interest to favorable economic fundamentals such as high economic growth and benign inflation. (PDI 12/25)

The 354 new MSMEs, as well as 743 existing MSMEs assisted by the DTI, have invested P415.2M and created 9,641 jobs. They have generated P261.8M in domestic sales and USD 24.1M in exports. The NICCEP is a three-year project funded by the Japan International Cooperation Agency (JICA) and being implemented by the DTI. It employs the industry cluster approach to support MSMEs and fosters inter-enterprise linkages among them. Cruz said development plans have been drafted for the clusters.


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January 14, 2013 5 “To strengthen the capacities of industry cluster development managers and implementers, we got experts from the German Agency for International

Cooperation (GIZ) to introduce ValueLinks or value chain methodology as a tool in industry cluster development,” she added.

NICCEP pilot industry clusters Luzon • Bamboo • Coffee • Dairy product • Health and wellness • Information and communications technology (ICT) • Milkfish • Tourism • Wearable and home style

2. DTI offers business aid for product development on indigenous materials

Visayas • Decors and houseware • Gifts • Health and wellness • ICT • Tourism

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he Department of Trade and Industry (DTI)-Nueva Vizcaya has offered help to budding business entrepreneurs seeking to develop indigenous materials as local products. DTI-Nueva Vizcaya Senior Trade and Industry Development Specialist Clifford Gregorio said

in our province so we are inviting everyone to venture on them,”

Gregorio said.

He said they are offering their services such as marketing, financial linking, production and technology and management among micro, small, and medium enterprises (MSMEs).

they are now promoting their basket/ bayong, woodbits, bamboo, and banana, or 4Bs program, to encourage entrepreneurs in venturing on locally available materials.

Gregorio also cited successes of MSMEs who have ventured on local raw materials available in the province. These MSMEs were exposed on regular trade fair and marketing events outside the province.

“These products have huge

They are now promoting the planting of raw materials in upland towns for the production of soft broom such as rattan and tiger grass.

prospects on the local and international markets and these materials are abundant

3. MSMEs to benefit from PPP

Mindanao • Banana • Coconut • ICT • Mango • Mining • Oil palm • Poultry • Rubber • Seaweeds • Tourism • Tuna • Wood

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he government was urged

to set up public-private partnership (PPP) agreement on the local level to support micro, small, and medium enterprises (MSMEs). University of the Philippines-School of Labor and Industrial Relations (UP-SOLAIR) Professor Rene E. Ofreneo said PPP should be repackaged

in which major projects should be distributed to small community ventures.

“How can small firms compete against these big corporations? The PPP should not just be for the rich and huge companies, but also for the people,” Ofreneo said.

He said localization of PPP projects would have a multiplier effect on the “grassroots” level. It can increase the income of the common folk and outweigh the issues on economic efficiency. (PDI 12/12)


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4. Marikina exempts small businesses from tax

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he Marikina City council has passed Ordinance No. 58, Series of 2012 that exempts small and home-based businesses from paying business taxes in 2013. In the Ordinance, businesses with less than P10,000 capital investment will enjoy tax exemptions while businesses with less than P50,000

Business Alert

1. SEC warns public against investment frauds

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he Securities and Exchange Commission (SEC) has warned the public against highyield investment schemes targeting mostly domestic helpers. “The public should not invest their money in such fraudulent or suspicious transactions because the promise of earning a very high income which is too good to be true is false or an investment scam,” the SEC said.

SEC warned the public of investment programs offered by groups operating in Cagayan, Ilocos Norte, Camiguin Island, and Cagayan de Oro that

2. DOST plans P400-M laboratory

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he Department of Science and Technology (DOST) is setting up a P400-M advance device and materials testing laboratory that can benefit automotive makers, electronics, and export industries. DOST Director for Planning and Evaluation Service Bernie S. Justimbaste said the laboratory

facility aims to provide electronic failure analysis at shorter turnaround time for companies. It also caters to biotechnology, nanotechnology, and genomics industries. DOST’s Philippine Council for Industry, Energy, and Emerging Technology Research and Development (PCIEERD) also aims

Vol. 17, No. 016

accumulated annual gross sales are also exempted from taxes for the same year. “We hope that through this ordinance, small and home-based businesses could adjust with the continual price increases in the market,” Marikina Mayor Del R. de Guzman said. (PDI 12/15)

promise an earning of P900 a month for every P100 investment made. SEC has urged the public to be more vigilant and immediately report instances of solicitations from dubious people, reminding that a corporation cannot operate or transact business without a license from the SEC. SEC Commission Secretary Gerard M. Lukban advised the public to be extra cautious in parting their hard-earned money and make sure to invest only in SEC-registered companies. (TPS 12/23)

to establish an Electronics Product Center that will assist the electronics sector in offering value-added products and services. Justimbaste said the agency is also beefing up a furniture testing facility to help local furniture exporters meet product standards set by importers. “The best way we can support their export trade is by providing the infrastructure for these testing facilities. We think we can help exporters for their products to compete in the international markets, at the same these testing centers will help in creating jobs for small and medium enterprises workers,” he said. (MAB 12/27)


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3. DOST, UP launch Seeds-TBI

4. PHL sees more vibrant industry sector

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he Department of Science and Technology (DOST) and University of the Philippines (UP) launched the Small Enterprise and Entrepreneurial Development Services-Technology Business Incubator (Seeds-TBI) facility at UP Visayas-Iloilo Campus.

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he Philippines is expected to see a more vibrant industry sector in 2013 as the government focuses on key industries and strives to ease the processes and costs in doing business. “Our key priority sectors, namely tourism, business process outsourcing (BPO), electronics, housing and real estate, agribusiness and forest-based products, logistics, and shipbuilding will be given more focus. We also need to consolidate the various industry roadmaps to further fuel the industry sector, especially manufacturing,” Socioeconomic Planning Secretary Arsenio M. Balisacan said.

Consumer News

1. DTI cites products under mandatory certification

2. Toy cosmetics contain highly toxic mercury

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January 14, 2013 7

Seeds-TBI will enable “technopreneurs” to have better links on value chain of information and communications technology (ICT) to attain stability and sustainability.

Meanwhile, Department of

Trade and Industry (DTI) Undersecretary for Trade and Investment Promotions Group (TIPG) Cristino L. Panlilio said

the manufacturing sector could be revived, noting the foreign investors’ strong interest. Panlilio said the government is also training manufacturers and exporters on how to take advantage of bilateral partnerships and free trade agreements (FTAs) to boost profit and diversify markets. (PDI 12/25)

he Department of Trade and Industry (DTI) cited anew products under mandatory product certification (MPC) to guide consumers in buying quality, reliable, and safe products.

prior to distribution in the market and selling.

Products under MPC are subject to inspection and testing by the DTI Regional/Provincial Office (RO/PO) or by the Bureau of Product Standards (BPS), a DTI bureau that develops, reviews, and updates Philippine National Standards (PNS)

Electrical products, mechanical/ building and construction materials, and chemicals, and other consumer products need to be certified.

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he EcoWaste Coalition has urged consumers to refrain from buying toy cosmetics unless there is a verifiable safety assurance. The group bought and tested 10 samples of toy cosmetics that

Products under MPC are classified into three groups, namely: safety, performance, and energy labeling.

For a complete list of products under MPC, please visit: www.bps.dti.gov.ph. retailers in Divisoria sell for only P10 to P50 in December last year. “Our investigation shows that some play make-up sets are not safe due to the presence of toxic mercury that can damage kidneys, reduce skin’s resistance to bacterial and


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Vol. 17, No. 018 fungal infections, and cause skin discoloration, rashes, and scarring,” said Aileen Lucero of the EcoWaste Coalition’s Project Protect.

Traces of mercury were detected in eight of the 10 samples in the range of 3.7 to 554 parts per million (ppm), exceeding the government’s allowable limit of 1 ppm for cosmetics. Some of these harmful items claim on their label that the products are “designed to be safe and harmless.” (EcoWaste Coalition 12/23)

Features The DTI Bagwis Seal of Excellence

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he Department of Trade and Industry (DTI) Bagwis Program recognizes establishments that practice fair business and uphold consumers rights and welfare. The Association of Southeast Asian Nations (ASEAN) and the ASEAN Committee on Consumer Protection (ACCP) distinguish Bagwis as one of the best practices of the country in consumer protection. The Gold Bagwis Program in particular includes the setting up of Consumer Welfare Desks (CWDs) in business places aimed at providing accessible and speedy resolution of consumer complaints. For 2012, a total of 202 businesses nationwide were awarded with the DTI Bagwis Seal of Excellence after having met the criteria under

ASEAN Watch 1. PHL grows popular as halal food market gateway

X-Ray Fluorescence (XRF) traces of mercury screening results • Pretty Girl Beautiful Colors, with 554 ppm • Fashion Girls Make-Up Set, with 179 ppm • Wink Club Beauty Series (small), with 4.4 ppm • Beauty Princess Make-Up Set, with 4.2 ppm • Pretty Girl, with 4.2 ppm • Wink Club Beauty Series (big), with 4.1 ppm • Dream Girl Make-Up Set, with 3.9 ppm • Dream Angel Make-Up Set, with 3.7 ppm

the said program. Out of the 202 establishment-awardees, 55 were given the highest level of award – the Gold Bagwis. The DTI has partnered with the private sector for this awarding. Since its launch in 2006, the Department has awarded a total of 810 Gold, 787 Silver, and 1,164 Bronze Bagwis Seals of Excellence. 2012 DTI Gold Bagwis Seal of Excellence awardees • Abensons Ventures Inc. (with 33 branches in the National Capital Region, 5 branches in Region 3, and 7 branches in Region 4A) • Save More Market (with three branches in Cebu) • Metro Gaisano Cebu, Toyota (with four branches in Cebu) • Toyota Cagayan De Oro • Toyota Davao

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and promotions arm, is currently undertaking huge preparations for the forthcoming International Food Exhibition (IFEX) Philippines 2013.

CITEM, the Department of Trade and Industry’s (DTI) marketing

CITEM has been promoting Philippine halal foods to the world and turning IFEX Philippines 2013, slated on May 16 to 19, as a grand showroom for halal products.

he Philippines is gaining popularity as a global business platform and gateway for the USD 632-B halal food market, the Center for International Trade Expositions and Missions (CITEM) reported.


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January 14, 2013 9

The event will have an entire pavilion devoted to halal to give the industry players all the room they need to market their products to a vast foreign audience, CITEM Executive Director Rosvi C. Gaetos said. Halal pertains to foods that are

allowed under Islamic Law. (MAB 12/22).

2. ASEAN-India FTA opens markets for Pinoy exporters

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he government urged Filipino exporters to look for opportunities in India amid slowdown in key markets like the United States (U.S.) and Europe and the existing trade agreement between the Association of Southeast Asian Nations (ASEAN) and India. “Engaging in FTA [Free Trade Area] markets such as India will help maintain the country’s competitiveness, promote crossborder complementation, and sustain investments inflow ,” Department of Trade and Industry-Bureau of Export Trade Promotion (DTI-BETP) Director Senen M. Perlada said.

The ASEAN-India trade agreement opens market opportunities for Filipino exporters engaged in furniture, food and beverage, personal care products, and information technology (IT), Perlada said. In 2011, India was the Philippines’ 18th top trading partner, 17th top export destination and 15th top import source. He said the ASEAN-India trade has steadily grown over the past five years from USD 21.2B in 2007 to USD 43.9B in 2011 due to the growing affluence of Indian consumers. (TPS 12/18)

STATWATCH P400B Investment target set by the Board of Investments (BOI) for 2012

P360B BOI-approved investments in 2011

P415.2M Investments put by

new and existing micro, small, and medium enterprises (MSMEs) under the National Industry Cluster Capacity Enhancement Project (NICCEP)

P261.8M Domestic sales generated by new and existing MSMEs under NICCEP USD 24.1M Exports sales generated by new and existing MSMEs under NICCEP 9,641 Jobs generated by new and existing MSMEs under NICCEP 354 MSMEs created through the NICCEP

202 Businesses nationwide awarded with the DTI Bagwis Seal of Excellence for 2012 82 Korean companies that branched out in the Philippines in 2011 55 Businesses nationwide awarded with the DTI Gold Bagwis Seal of Excellence for 2012

5%-6% Growth target for the country’s electronics industry this year as set by the Semiconductors and Electronics Industry of the Philippines Inc. (SEIPI) 1 ppm Traces of mercury in products allowed by the government


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Vol. 17, No. 0110

DTI Direct*

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

Dec Jan’12 Feb’12

Business Name

1,458 3,665 2,741 2,784 2,182

Consumer Welfare 966

Mar’12 April’12 May’12 June’12 July’12 Aug’12 Sept’12 Oct’12 Nov’12 Dec’12 2514 2,243 1,889 1,606 1,419 1,493 1,515

742

860

653

670

895

761

990 2,629 2,128 2,235 1,917 1,496 2,370

Exports

5

4

7

6

7

4

5

12

3

4

2

3

4

Investments

0

0

1

0

6

3

0

2

2

1

3

1

0

15

12

10

5

19

18

8

14

13

30

29

19

9

878 1,080 1,023

920

858

891 1,050

529

438

MSMEs Others

941 1,157 1,179 1,251

TOTAL

3,385 5,580 4,798 4,699 3,762 4,514 4,269 5,466 4,610 4,580 4,494 3,027 3,582

CUMULATIVE CALL TYPE

Jan-Nov 12 % vs. Total December 2012

November 2012

% Increase/ Decrease

Business Name

24,276

45.48

761

979

-22.27

Consumer Welfare

17,585

32.94

2,370

1,496

58.42

Exports

61

0.11

4

3

33.33

Investments

19

0.04

0

1

-100

186

0.35

9

19

-52.63

Others

11,254

21.08

438

529

-17.2

TOTAL

53,381

100.00

3,582

3,077

MSMEs

CALL RESOLUTION STATUS Jan-December 2012

Resolved 53,149 (100%)

Referred 232, ( 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.

December 2012

Resolved 3,577 (100%)

Referred 5, ( 0%)


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

January 14, 2013 11

Title: Trade

in Services Negotiations: A Guide for Developing Countries

Publisher: World Bank Call Number: 02 000/07.03/WB/2010 This book addresses the complexities of the organization, formulation, and implementation of trade-related reforms in the services sector. It provides a conceptual framework for trade policymaking and negotiation and practical tools to guide negotiations on policies that affect the trade and investment in services. The tools and practical exercises that are presented in this volume will prove a useful resource for policymakers and negotiators who are engaged in efforts to expand the coverage of trade agreements to trade and investment policies in services.

Title:

ASEAN Economic Community – Handbook for Business

Author : The ASEAN Secretariat Call Number: 45 000/07.03/ ASEAN/2011 This handbook provides the most up-to-date and easy-to-comprehend information on the Association of Southeast Asian Nations (ASEAN) Economic Community (AEC) for the private sector, civil society, and the general public. This will assist companies in charting their business plans and enhance the engagement of regional and transnational businesses in commercial activities and services throughout the region. It will also serve as a useful guide for small and medium enterprises (SMEs) to help them expand their business activities across the ASEAN region and strengthen their links with the global economy.

Legend:

MAB - Manila Bulletin MAL - Malaya MST - Manila Standard PDI - Philippine Daily Inquirer TPS - The Philippine Star EcoWaste Coalition

lEditor-in-Chief:

Anne L. Sevilla lManaging Editor: Vic S. Soriano lAssociate Editor: Resty P. Par lWriters: Jam A. Hourani, Elaine M. Lazaro, Emman R. Caleon lDesign/Layout: Ren C. Neneria lCirculation: Myrna V. delos Reyes To subscribe, email: publications@dti.gov.ph

Dataline 01 (2013)  

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

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