October 21, 2013 1
October 21, 2013 Vol. 17, No. 21
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: firstname.lastname@example.org Online: http://www.dti.gov.ph
In this issue Focus BOI, PEZA okay P398-B investments Inside DTI BOI Ombudsman sought Good News, Philippines! 1. Over 7-% growth eyed in Q3 2. PHL sees employment boom in manufacturing 3. Franchisers bullish MSME News 1. DTI launches SME Roving Academy 2. DTI to expand SSF Program in 2014 3. DTI to implement more SSF projects 4. DTI boosts ‘tapa’ industry in Pangasinan
Business Update 1. DTI lures Chinese investors 2. All systems go for PHL’s GSP+ application 3. DTI organizes PHL trade fair in Italy 4. Quezon ICON 2013 offers business opportunities Consumer News 1. DTI joins CWM celebration 2. DTI posts SRPs for basic goods in Zamboanga City 3. Importers notified on unclaimed ICC certificates Features PHL BPO sector to stay strong ASEAN Watch 1. Asian economies better in handling external shocks 2. PHL, China sign cooperation act 3. PHL leads ASEAN RORO connectivity Statwatch What’s New?
Focus BOI, PEZA okay P398-B investments
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nvestments registered with the Board of Investments (BOI) and the Philippine Economic Zone Authority (PEZA) hit P398.3B in the first eight months of the year amidst the positive economic outlook for the year. The January-August new investments indicated a 26-% growth over the P317B approved by the two investment promotion agencies (IPAs) during the same period last year. “Big investments now are led by local groups like the Ayala Group and San Miguel. We expect local investments to highly complement foreign direct investments (FDIs) which we see growing by 15% to 20% per annum starting 2013,” Department of Trade and Industry (DTI) Secretary Gregory L. Domingo said. Of the total registered investments in the review period, the BOI accounted for P287.48B while PEZA registered P110.82B.
BOI Ombudsman sought
Good News, Philippines!
1. Over 7-% growth eyed in Q3
uropean investors urged the Department of Trade and Industry (DTI) to reinstate an investor relations manager, or ombudsman, to guide them through the process of placing their capital in the country.
Domingo said more local companies were investing in big-ticket projects this year while foreign investments were also on the uptick. Foreign direct investments (FDIs) in PHL (In USD Billion) Period H1 2013 H1 2012 H1 2011 H1 2010
Amount 2.2 2.8 1.8 1.2
Investments in economic zones rose by 139% in the first six months to USD 91.91M from USD 38.49M a year ago. Among the big-ticket investments in the first semester were Fomento Economico Mexicano Sociedad Anonima’s acquisition of Coca Cola Bottling Corp. for USD 688.5M and Itochu Corp.’s buyout of Dole Food Company for USD 1.68B. (MST 09/18)
The European Chamber of Commerce of the Philippines (ECCP) has called for the appointment of a new investments ombudsman to be assigned at the Board of Investments (BOI) after the previous BOI Ombudsman was reassigned to another government agency.
he Philippine economy may experience another higher than 7-% growth in the third quarter amid continued government spending and expansion in tax base, the First Metro Investment Corp. (FMIC) and the University of Asia and the Pacific (UA&P) said.
The Philippine economy grew 7.5% in the second quarter, the fastest in Southeast Asia and at par with China’s expansion in the same period. This brought first half growth to 7.6%, already above the government’s full-year target of 6%-7%.
“The third quarter was off to a fast start as the government resumed infrastructure spending, which rose by 45.1% in July,” FMIC and UA&P said.
FMIC and UA&P said that given the sustained increase in government infrastructure spending and the manageable inflation, economic growth in the
October 21, 2013 3
second half of the year may again surpass the government’s target. Inflation, which averaged 2.8% as of August, is expected to remain low throughout the second half of the year.
2. PHL sees employment boom in manufacturing
ilipinos may expect more employment in the manufacturing sector as big manufacturing plants are being established in the Philippines. Department of Trade and Industry (DTI) Secretary Gregory L. Domingo said the Department has approved a number of foreign investments in manufacturing during the first half of the year. “In the first half of this year, manufacturing grew by 9.9% and that is actually surpassing the growth of services at 7.1%. This sector is going to be sustainable,” Domingo said. He said successful inbound business missions from foreign delegations contributed to the growth of different industries especially the manufacturing sector. “There are many plants being built right now. These are not small plants. These are mega plants which have
3. Franchisers bullish
FMIC and UA&P said remittances from Filipinos abroad are expected to remain strong in the second half. This, coupled with peso depreciation, would further support domestic consumption in the period. (TPS 09/26) five ha to 10 ha for manufacturing from only one company,” Domingo said. He said local manufacturing is very competitive among other Southeast Asian and East Asian countries as labor cost is generally stable. The country, he said, may also take advantage of the situation of its neighboring countries experiencing increasing inflation rate and other internal challenges. With its growing economy and young population, the Philippines is attracting foreign investments, he said. Inbound missions in the country Year 2010 2011 2012 2013
No. of companies 276 1,373 1,765 850*
member-companies are now into global expansion.
The Association of Filipino Franchisers Inc. (AFFI) said sales were projected to grow by another 15% to P71.4B in 2014 as more
“The appetite to expand has never been this voracious,” Laurel said.
group of local franchisers expects combined sales of members to increase 15% to P62.1B in 2013 from P54B in 2012 as more local brands expand overseas.
AFFI Chairman Maria Teresa D. Laurel said the expansion was keeping members keen on trends and updates.
MSME News 1. DTI launches SME Roving Academy
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he Department of Trade and Industry (DTI) has launched recently the SME Roving Academy to enhance micro, small, and medium enterprises’ (MSMEs) competitiveness in the local and international market. This initiative is meant to provide continuous learning program for entrepreneurs to help them better set up and step up their operations and improve their competitiveness, Bureau of Micro, Small, and Medium Enterprise Development (BMSMED) Officer-in-Charge (OIC) Jerry T. Clavesillas said. Meanwhile, the DTI Cordillera Administrative Region (CAR) signed a Memorandum of Understanding (MOU) with partner agencies and institutions to support the SME Roving Academy program implementation in their area. Identified as potential areas of cooperation include implementation of support and assistance to DTI-CAR based on commonly agreed objectives and activities SME Roving Academy seven learning stages
• Startup and capability building • Market awareness • Market readiness • Export readiness • Export market entry • Export sustainability • Export expansion
2. DTI to expand SSF Program in 2014
he Department of Trade and Industry (DTI) plans to expand the scope of its Shared Service Facility (SSF) Program to accommodate greenfield as well as bigger and more ambitious projects in 2014. “DTI Secretary Gregory L. Domingo said that by next year we have to look into greenfield projects.
and co-branding to highlight the public-private partnership (PPP) initiative, DTI-CAR Regional Director Myrna P. Pablo said. Partner agencies and institutions Government • Cooperative Development Authority (CDA) • Department of Agrarian Reform (DAR) • Department of Agriculture (DA) • Department of Health - Food and Drug Administration (DOH-FDA) • Department of Labor and Employment (DOLE) • Department of Science and Technology (DOST) • Department of Social Welfare and Development (DSWD) • Philippine Information Agency (PIA) • Regional Tripartite Wages and Productivity Board (RTWPB) • Technical Skills and Development Authority (TESDA) Academe • Benguet State University (BSU) • National Institute of Information Technology (NIIT) • Saint Louis University - Extension Institute for Small-Scale Industries (SLU-EISSI) • University of Baguio (UB) • University of the Cordilleras (UC) Others • Baguio and Benguet local government units (LGUs) • Baguio-Benguet Bankers Club (BBBC) • Philippine Chamber of Commerce and Industry (PCCI) Baguio-Benguet and Cordillera Chapters • Regional Development Council Sectoral Committee on Economic Development (RDC-Econ SECOM)
These are new ventures, innovations, start-ups. Interested companies may already have a track record in business but venturing into new innovation,” DTI Undersecretary for Regional Operations and Development Group (RODG) Zenaida C. Maglaya said. DTI is seeking another funding of P700M for the SSF Program
October 21, 2013 5
for 2014 and hopes to increase it to hire people to help in fieldworks based on a per need basis only. “We need to approve projects that have potential, meaning it can be marketed easily. It should also have a production base existing already,” Maglaya said. She cited projects like rubber mat making and coco fiber processing
3. DTI to implement more SSF projects
he Department of Trade and Industry (DTI) plans to implement more Shared Service Facility (SSF) projects in the region this year to provide micro, small, and medium enterprises (MSMEs) a common service area with better technology and equipment, DTI-Region 8 Director Cynthia R. Nierras said. The project could help the entrepreneurs tap a wider market and be integrated in the global supply chain. Project
as possible projects that could fit into DTI projects in 2014. DTI’s industry clustering and value chain analysis approach has identified the need of micro, small, and medium enterprises (MSMEs) for advanced machinery and equipment to improve their production processes in terms of quality, productivity, and efficiency.
Meanwhile, DTI-Leyte is preparing to release additional equipment and machineries to six MSMEs that qualified under its SSF project. SSF is DTI’s major project under its “Big Push” for SME Development Program that seeks to increase MSMEs’ overall productivity, DTI-Leyte Provincial Director Desiderio P. Belas Jr. said.
Equipment and machineries provided
Pandan bag making in Baybay Digital weighing scale, heavy duty industrial sewing City and bariw making machines, industrial dryer, industrial fan, and punch in the Capoocan municipality machine (for buttons) Macapuno food processing in Baybay City
Baking oven, fabricated mechanical dryer, and stainless ball molder
Root crops food processing in Baybay City
Continuous bond sealer with table, double tank gas fryer, mechanical dryer, root crop grater/chipper machine, root crop washer/peeler, sink food grade, stainless steel tables, steamer, and vacuum sealer economical with gas flush
Fermented coconut sap (tuba) project in Palo town
High lift, intermediate bulk containers, nitrogen generator system, nitrogen tank/regulator with accessories, pallet jack, solar system generator, and stainless table
Buko-cassava pie project by the Arado Buko-Cassava Pie and Pastries Association
Cauldrons, coconut grater, cooking rack, display chiller, heavy duty stove with LPG tank, impulse sealer, ladles, microwave oven, oven, pie plates, refrigerator, spiral dough mixer, stainless steel basins, and working tables
4. DTI boosts ‘tapa’ industry in Pangasinan
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he Department of Trade and Industry (DTI)-Region 1 and the local government of Pangasinan 4th District turned over meat processing equipment worth P935,000 to Mangaldan entrepreneurs to further boost the famous “pindang” or “tapa” in their area. The equipment could help revolutionize the local meat processing industry as processors
Business Update 1. DTI lures Chinese investors
he government is working to attract more Chinese investments to improve economic ties between China and the Philippines. Department of Trade and Industry (DTI) Secretary Gregory L. Domingo discussed with Chinese counterparts how both parties could work to encourage more Chinese businesspeople to invest in the country during the 10th China-Association of Southeast Asian Nations (ASEAN) Expo (CAEXPO) in Nanning last month.
2. All systems go for PHL’s GSP+ application
he Department of Trade and Industry (DTI) is in the final stage of preparations for the Philippine application to the European Union’s (EU) Generalized System of Preferences (GSP+) scheme. “We have consolidated the documentary requirements relative to the ratification and implementation of the 27 international conventions. These documents are part of our submission to the EU together with a formal letter signifying our country’s intention to apply to the GSP+,” DTI Undersecretary for Industry Development and Trade Policy Group (IDTPG) Adrian S. Cristobal Jr. said.
can now produce more quality dried meat and other processed meat products from beef, carabeef, and pork, Mangaldan Mayor Bona Fe Parayno said. The town celebrates the “Pindang Festival” yearly to give due recognition to its dried meat industry. Pinding is now available in supermarkets in Metro Manila and other parts of Luzon.
“Historically, we have had underrepresentation in Chinese investments from way before. Last time I was in Nanning, we discussed that we should correct the imbalance,” Domingo said. The Philippines, which was named the Country of Honor at the CAEXPO, presented investment opportunities in agribusiness, infrastructure, tourism, and manufacturing during the event.
The GSP+ scheme is an autonomous trade arrangement where the EU grants non-reciprocal trade references to exports of 176 GSP beneficiary countries, including the Philippines. Upon the country’s qualification, it is expected to increase its exports to the EU by 12%. “Increased exports will translate to enhanced production capacity and will generate an additional 270,000 jobs in both the agriculture and manufacturing sectors,” Cristobal said.
3. DTI organizes PHL trade fair in Italy
4. Quezon ICON 2013 offers business opportunities
October 21, 2013 7
he Department of Trade and Industry (DTI) organized a four-day trade exhibit that featured works of top Filipino fashion designers using local fibers in Italy.
of their natural fabric,” European Network for the Filipino Diaspora (ENFiD) Executive Director and Fibre Filippine organizer Marie Luarca-Reyes said.
Dubbed as “Fibre Filippine,” the trade activity was an effort to promote the country’s products and boost investments in the production of piña and abaca.
Fibre Filippine ran from October 17-20 at the Circolo Ufficiale della Marina-Lungotevere Flaminio in Rome.
“The purpose of organizing the trade exhibit was primarily to introduce to the Italian society the abilities and talents of the Filipinos in the use
Top Filipino designers whose works were showcased included Renee M. Salud, Beatrice “Patis” P. Tesoro, Ditas Sandica-Ong, and Anthony C. Legarda.
The forum aimed to impart knowledge, technologies, and potential resources on investments and business opportunities.
he Department of Trade and Industry (DTI) held the Quezon Investment Conference (ICON) 2013 last month, drawing together business groups, industry experts, and financing professionals. DTI Region 4-A Director Marilou Quinco-Toledo said the Department and its partners in the government and in the private sector are working hard to mobilize prospective investors to take the opportunities Quezon has to offer.
Consumer News 1. DTI joins CWM celebration
he Department of Trade and Industry (DTI) set various activities for different regions for the nationwide celebration of this year’s Consumer Welfare Month (CWM). 2013 CWM activities
• • • • • • • • •
Bagwis awardees recognition Bangus deboning demonstration Meat-processing demonstration Poster making competition Sideshows by partner agencies Diskwento Caravan FDA licensing services Information campaign on consumers’ welfare and protection Consumers’ education campaign
Toledo briefed the participants on DTI’s current strategy for small business development and emphasized the importance of industry cluster development. Industry experts also discussed business opportunities on the industry clusters being promoted for investment by the Quezon province. With the theme “Health Products— Quality, Efficacy, Safety, and Transparency: Everybody’s Concern,” the annual observance is on its 16th year, having begun
CWM partner agencies of DOH and DTI
• • • • • • •
Department of Agriculture (DA) Department of Education (DepEd) Department of the Interior and Local Government (DILG) National Meat Inspection Service (NMIS) DepEd Department of Environment and Natural Resources (DENR) National Food Authority (NFA)
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by virtue of Presidential Proclamation No. 1098 in 1997. The 2013 CWM is hosted by the Department of Health (DOH)
2. DTI posts SRPs for basic goods in Zamboanga City
3. Importers notified on unclaimed ICC certificates
he Department of Trade and Industry (DTI) issued suggested retail prices (SRPs) of basic goods in Zamboanga City during the standoff between the military and the Moro National Liberation Front (MNLF) amidst reports of scarcity of commodities in the area.
he Department of Trade and Industry -Bureau of Product Standards (DTI-BPS) has summoned 54 importers to collect Import Commodity Clearance (ICC) certificates they applied for. Some 212 unclaimed ICC certificates belonging to the said importers were found during a periodic inventory check. “These importers were given 48 hours from the date of publication of the DTI’s urgent notice to them to collect their ICC certificates. Otherwise, the Notice shall be a Recall Order of their products and shall cancel the ICC certificates based on the Department [Administrative] Order (DAO) No 05, Series 2008 and DAO 02: 2007,” DTI-Consumer Welfare and Business Regulation Group (CWBRG) Officer-inCharge (OIC) Atty. Victorio Mario A. Dimagiba said. Importers are prohibited from selling or transferring products covered
Food and Drug Administration (FDA) and organized in coordination with other concerned government agencies.
The issued SRPs served to guide the pricing for retailers and alert consumers on overpricing. “DTI has been involved from the very first two days of the crisis. We assured ample supply of basic goods and stable prices until the situation goes back to normal,” DTI Secretary Gregory L. Domingo said.
by the mandatory certification of the BPS Product Certification Scheme that have no ICC stickers. Those found selling items without ICC stickers will be filed with administrative charges. Products of the 54 importers
• • • • • • • • • • • •
Ceramic tiles Circuit breakers Digital Video Disc (DVD) players Electric rice cookers Electronic ballasts Lead-acid storage batteries Pneumatic tires Portable fire extinguishers Polyvinyl chloride (PVC) electrical tapes Safety glass for automotive applications Sanitary ware Washing machines Products covered by mandatory certification
• • • •
Building and construction materials Chemical products Electrical and electronic home appliances Consumer products
Features PHL BPO sector to stay strong
ASEAN Watch 1. Asian economies better in handling external shocks
October 21, 2013 9
he recovery of developed Western economies is not seen to dampen the growth of the local business process outsourcing (BPO) industry.
Revenues from the BPO sector, which rank second to remittances from overseas Filipinos (OFs), reached USD 13B in 2012 and is expected to hit USD 16B this year.
Bangko Sentral ng Pilipinas (BSP) Deputy Governor Diwa C. Guinigundo said the sector has both procyclical and countercyclical qualities that enable it to grow despite changes in the global economy.
The Information Technology and Business Process Association of the Philippines (IBPAP) targets to boost the BPO sector’s revenues to USD 25B and hire 1.3M Filipinos by 2016.
“If companies are doing well, they need to outsource to remain competitive. But when their economies are doing bad, they have to resort to outsourcing because they need to cut on costs,” Guinigundo said.
The local BPO industry, also hailed as the “sunshine industry,” accounted for 800,000 jobs at the end of 2012. It has been growing over the past 10 years, surpassing India in 2010 as a provider of voice-based BPO services. (PDI 09/22)
sian economies, including the Philippines, are better in handling external shocks now than they were during the 1997 financial crisis, international economic analysts said. In the Royal Dutch Shell’s Innovation Summit 2013, experts particularly agreed that Southeast Asian economies are rising and expected to be Asia’s big growth engine. In one of the sessions, Shell Refining Co. Independent and Non-Executive Director Yvonne Chia said Asian economies started to become innovative and have collaborated well after the financial crisis. Chia said Asian economies mostly work together to expand their capital markets by trying to harmonize standards in terms of capital flows. They have also put in place a whole infrastructure for funding and came together for systemic risks surveillance, she said. (TPS 09/26)
STATWATCH P398.3B Investments registered with the Board of Investments (BOI) and the Philippine Economic Zone Authority (PEZA) in Jan-Aug 2013 vs. P317B approved investments in Jan-Aug 2012
P287.48B BOI-approved investments in Jan-Aug 2013
P110.82B PEZA-approved investments in Jan-Aug 2013
P62.1B Target combined sales of local franchisers for 2013
P54B Sales generated by local franchisers in 2012 9.9% Manufacturing industry growth in H1 2013
7.1% Services sector’s growth H1 2013
2. PHL, China sign cooperation act
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he Philippines and China signed a memorandum of understanding (MOU) to create a transparent, liberal, and facilitative investment regime aimed at expanding the two countries’ bilateral economic development.
Philippine Investment Promotions Plan Steering Committee (PIPP-SC) Chairman Arnel Paciano D. Casanova and China-ASEAN Business Council (CABC) Executive Secretary General Xu Ning Ning signed the agreement during the 10th ChinaASEAN Expo in Nanning, China recently. “The signing of the MOU is based on the principle of equality, mutual benefit, and win-win cooperation for both countries,” Casanova said.
3. PHL leads ASEAN RORO connectivity
He said the agreement is a reaffirmation of the Philippines’ and China’s existing strong investment promotion cooperation. Both parties also agreed to place the Philippines in global supply chains by engaging CABC member associations in manufacturing, agro-industrial business, and tourism infrastructure development areas. Furthermore, the agreement enables PIPP-SC and the CABC to establish effective platforms for cooperation and expand channels of exchanges to support and complement the offshore strategies of Chinese enterprises to the Philippines. (PDI 09/26)
It will connect Batangas City to Humen, China and Danang, Viet Nam.
The Asian Marine Transport Corp. provided maritime services for their maiden route connecting Davao and General Santos City to Bitung City and Manado City in Indonesia.
One vessel each is assigned to Philippines-Indonesia and Philippines-China-Viet Nam routes but they may possibly add more if the demand grows, Asian Marine Transport Corp. Senior Vice President (SVP) and Chief Financial Officer (CFO) Ernesto V. Tan said. (PDI 09/27)
he Philippines has opened up the Association of Southeast Asian Nations (ASEAN) RORO Connectivity with the launching of a roll-on roll-off route to Indonesia.
The second route of the RORO connectivity will be launched in 2015.
(A synopsis of selected book acquisitions at the DTI-TIIC library)
Publisher : Department of Trade and Industry-Bureau of Export Trade Promotion Call Number : 45 608/00.07/DTIBETP/2013 The kit contains the following: Exponet Directory 2013 and Philippine Export Development Plan (PEDP 2011-2013) key points, brochures on BETP’s general guide to services and a guide for SME Exporters, procedures for the availment of travel tax exemption (TTE) for exporters; accreditation of exporters under the Export Development Act (EDA); accreditation of coffee exporters; Client Profile Registration System (CPRS) for coffee; CPRS for accredited exporters under the EDA; Automated Documentation System (AEDS); clearance and issuance of International Coffee Organization certificate of origin (CO); and shipment of sample-size coffee.
MST PDI TPS
- Manila Times - Philippine Daily Inquirer - The Philippine Star
Title : Good to Grow? The Environment for Asia’s Internet Businesses
Title : Bureau of Export Trade Promotion Tool Kit
Entered as Third-Class Mail at the Makati Central Post Office under Permit No. PM-04-08 valid until 31 December 2013
Publisher : The Economist Intelligence Unit Call Number : 45 000/13.06.02/EIU/ 2013 This report is based on desk research and interviews with more than 30 Internet entrepreneurs and other experts in Asia. It focuses on the internal and external factors that influence the business models and growth ambitions of Asian Internet companies, such as commercial and regulatory environment and the market for talent and the ecosystem of collaboration. 32p.
Philippine Postal Permit No. PM-04-08
October 21, 2013 11
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