In this issue - Embassy of the Philippines

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09 March 2015 1
09 March 2015
Vol. 20, No. 05
A bi-monthly digest of global and domestic industry trends and developments. Published by
the Knowledge Management and Information Service (KMIS) of the Department of Trade
and Industry (DTI)  Manila, Philippines  Tel. (632) 895.3611  Fax (632) 895.6487
 To subscribe, email: [email protected]  Online: http://www.dti.gov.ph
In this issue
Focus
PHL economy rises by 6.1% in 2014
Inside DTI
Domingo visits Iloilo cooperative
Good News, Philippines!
1. Biz groups optimistic this year
2. Electronics exports outperform
2014 target
MSMEs
1. Suspension of BOC’s stuffing policy
beneficial to MSMEs
2. SMEs to benefit from AFAB growth
3. Business orientation, coaching
conducted in Misamis Oriental
Business Update
1. DTI opposes House Bill 2492
2. Cabotage Law amendment backed
3. Workshops to streamline processing
of permits set for chemical industry
4. SEC wants higher fines
for disclosure violations
Consumer News
1. Traders enjoined to uphold
copyright law
2. Meralco Power Lab launched
Feature
PHL’s export to EU to expand with GSP+
Statwatch
ASIA Watch
1. PHL needs to unify local, national laws
2. PHL, Asia’s 6th fastest rising urban
population
What’s New
dataline
Focus
PHL economy rises
by 6.1% in 2014
PHL GDP growth rates (in %)
By quarter (2014)
Q15.6
Q26.4
Q35.3
Q46.9
Vol. 20, No. 05 2
B
eating the economic growth
forecasts of private analysts
which stood at a maximum
of 6%, the country’s gross domestic
product (GDP) registered a 6.1-%
expansion in 2014.
Data from the National Economic
and Development Authority (NEDA)
and the Philippine Statistics Authority
(PSA) showed that the country’s full
GDP growth last year was supported
by the 6.9-% rise in the last quarter
of 2014.
Socioeconomic Planning
Secretary and NEDA DirectorGeneral Arsenio M. Balisacan
said the growth was broad-based as
all three major sectors – agriculture,
industry, and services – expanded
robustly during the period.
Balisacan highlighted the 4.8-%
growth in the agriculture sector
in the fourth quarter last year, mainly
due to the recovery in crop harvest
and fisheries output.
Notably, industry output rose
by 9.2% in the period, its highest
in the last six consecutive quarters
since Q3 2013, on the back of a
double-digit expansion in construction.
The services sector also has
sustained growth with its 6-% rise
in the fourth quarter in 2014.
“These numbers show the sustaining
and reinforcing dynamism from the
private sector that is contributing to
the growth of the Philippine economy
amid the various challenges it faces,”
Balisacan said.
Growth by Sector
In %
INDUSTRY
Q4 2013
1. AGRI., HUNTING, FORESTRY, AND FISHING0.9
a. Agriculture and forestry
2.3
b. Fishing
-4.4
Q4 2014
4.8
4.7
4.8
2. INDUSTRY SECTOR
a. Mining and Quarrying
b. Manufacturing
c. Construction
d. Electricity, Gas, and Water Supply
7.69.2
-2.5
-3.2
12.0
7.3
-5.2
20.5
3.0
6.3
3. SERVICE SECTOR
a. Transport, Storage and Communication b. Trade and Repair of Motor Vehicles,
Motorcycles, and Personal and Household Goods
c. Financial Intermediation
d. Real Estate, Renting anfd Business Activities
e. Public Administration and Defense; Compulsory
Social Security
f. Other Services
6.76.0
8.1
6.3
6.4
5.3
10.7
6.6
7.6
8.3
-2.3
10.9
Source: PSA
6.4
2.5
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Inside DTI
Domingo visits
Iloilo cooperative
D
espite his busy schedule,
DTI Secretary Gregory L.
Domingo personally inspected
the status of the P1.6-M shared-service
facility (SSF) established
by the Department and the municipal
government of Leon for the Leon
Multipurpose Cooperative
in Iloilo province.
out P750,000 as counterpart for the
installation of fruits and vegetables
processing facilities for the micro,
small, and medium enterprises
(MSMEs) in the municipality of Leon.
DTI-6 Officer-in-Charge (OIC)
Wilhelm M. Malones said the
particular SSF was the first to be
launched in Western Visayas.
The SSF is a major component
of the Department’s MSME
development program that seeks
to improve the entrepreneurs’
competitiveness by extending
to them support in terms of machinery
and skills, among others.
The DTI provided P900,000 while the
local government unit (LGU) shelled
Good News,
Philippines!
1. Biz groups optimistic
this year
T
he economy would grow faster
this year, business groups
Makati Business Club (MBC),
Philippine Chamber of Commerce and
Industry (PCCI), and Semiconductor
and Electronics Industries in the
Philippines, Inc. (SEIPI) said.
These groups see the economy
to fare better than the 6.1-% uptick
posted last year, citing the
public-private partnership (PPP)
projects to be rolled out and other
construction activities to be undertaken.
2.Electronics exports
outperform 2014 target
09 March 2015 3
Malones said the Secretary wanted
to personally observe how the project
was going.
Yao also said exports and local
consumption will fuel stronger
economic growth.
“The expected increase in public and
private construction due to our hosting
of Asia-Pacific Economic Cooperation
(APEC) will be able to greatly assist
in attaining our yearend goal of
7-% gross domestic product (GDP)
growth,” MBC Executive Director
Peter Angelo V. Perfecto said.
“For this year, we are still looking
at 6.5-% growth and up. First of all,
because of government’s higher
expenditure on infrastructure and the
PPP projects,” PCCI President
Alfredo M. Yao said.
Apart from infrastructure projects,
SEIPI President Danilo C.
Lachica said he expects other major
economic growth drivers such as power
availability, peace and order, a stable
peso, favorable business climate,
and political positioning for the 2016
elections. (TPS 01/30)
E
with a month to spare due to strong
performance by the semiconductor
and electronic data processing
subsectors, Lachica said.
The electronics export sector has
surpassed the industry association’s
target of 7%-11% growth for 2014
In the January to November period
last year, semiconductor exports
increased by 1.5% from USD 15.86B
to USD 16.1B; while information
technology (IT) spending,
which includes electronic data
processing, grew by 28% from
5.07B to USD 6.5B.
lectronics exports have done
better than their
2014 growth target after a
7.9-% rise in the first 11 months
last year, Semiconductor and
Electronics Industries
in the Philippines, Inc.
(SEIPI) President Danilo C.
Lachica said.
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Vol. 20, No. 05 4
For 2015, Lachica said the board
is sticking to its growth forecast
of 5%-7% considering the effect
of coming from a higher base in 2014,
MSME News
1.Suspension of BOC’s
stuffing policy beneficial
to MSMEs
T
he Bureau of Customs’ (BOC)
decision to suspend the
implementation of the stuffing
policy would be beneficial to
micro, small, and medium
enterprises (MSMEs), the Philippine
Exporters Confederation Inc.
(PHILEXPORT) said.
The stuffing policy requires BOC
personnel to keep watch of the
stuffing or loading of containers
in factories or warehouses to ensure
the legitimacy of exporters as part
of the risk management system
being developed for exports.
Through Customs Memorandum
Order (CMO) No. 4-2015 dated
21 January, the BOC said the stuffing
policy is repealed in its entirety.
According to the CMO, the repeal
means that “there is no longer any
2.SMEs to benefit
from AFAB growth
T
he Authority of the Freeport
Area of Bataan (AFAB)
is expecting more investors
to come with the establishment
of the ASEAN Economic Community
(AEC) by yearend.
AEC transforms the Association
of Southeast Asian Nations (ASEAN)
bloc into a single, liberalized market.
The AFAB said foreign locators,
who bring in more investments
that translate to generation of job
opportunities, will also help small
and medium enterprises (SMEs)
in Bataan province.
while stressing essentially the same
factors will drive up electronics exports
in 2015. (BWD 02/01)
requirement for exporters or their
brokers to submit a Notice of Stuffing,
nor any requirement for a Stuffing
Inspector to be present during the
stuffing of a container.”
It added that the Authority to Load
issued by the BOC-Export Division
would be enough basis for any export
container to be loaded.
The PHILEXPORT earlier called on
the BOC to defer the implementation
of the stuffing policy, citing that
this opens opportunities for graft
and corruption given the limited
BOC resources and manpower.
“The suspension is a big relief
to exporters; a welcome development
and positive response to our position,”
PHILEXPORT President Sergio
R. Ortiz-Luis Jr. said. (TPS 01/24)
“We see that SMEs would find niches
in at least serving the bigger players,”
AFAB Chairman Deogracias
G.P. Custodio said.
Meanwhile, AFAB is also pushing
for stronger partnership with the
Technical Education and Skills
Development Authority (TESDA).
“We have strengthened our
communication lines with TESDA
and our locators regarding their plans.
This is to make sure that we can
provide the labor requirements
of our existing and incoming locators,”
Custodio said. (MAT 02/02)
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3.Business orientation,
coaching conducted
in Misamis Oriental
C
agayan de Oro City, as one
of the pilot areas for the
Negosyo Centers establishment
in 2014, launched its first Negosyo
Center at the Department of Trade
and Industry (DTI) - Misamis Oriental
on 13 November 2014.
The Center recently conducted its
business orientation and coaching
sessions to new and existing local
micro, small, and medium enterprises
(MSMEs) on 18-26 February 2015.
The trainings included the following
subjects:
• Market Planning
• Entrepreneurship Development
Seminar
• Food Packaging and Labelling
• Inventory Control
Business Update
1. DTI opposes
House Bill 2492
2.Cabotage Law
amendment backed
T
09 March 2015 5
• Product Trends & Forecasts
2015-2016
• Year-end Tax Reminders and
Handling Bureau of Internal
Revenue (BIR) Tax Matters
Republic Act (RA) 10644
or Go Negosyo Act enacted last
15 July 2014 mandates the creation
of Negosyo Centers in all provinces,
municipalities, and cities nationwide
to promote ease of doing business
and to facilitate access to services
for MSMEs within their jurisdiction.
The Negosyo Center also provides
services on entrepreneurship,
marketing, technology, financial
management, and productivity
and efficiency.
he Department of Trade
and Industry (DTI) raised
its objection to House Bill 2492
or the Tax Incentives Management
and Transparency Act (TIMTA)
which proposes that a tax expenditure
account (TEA), an automatic
appropriation similar to the allocation
for debt servicing, be created
to account for projected incentives.
Services Group (BOI-MSG)
Executive Director Efren V.
Leaño said.
“The DTI maintains its reservations to the
proposed scheme. This may also cripple
the incentive administration of the country
and may result in breaches of contract
apart from the possible damage to the
country’s investment image,” Board
of Investments-Management
For her part, bill author Camarines
Sur 3rd District Representative
Maria Leonor Gerona-Robredo
believed her proposal would make the
monitoring of investment grants easier
and more transparent.
he Philippine Economic Zone
Authority (PEZA) is pushing
for the amendment of the
Cabotage Law to increase
the level of competitiveness
in the maritime sector.
need to open up domestic routes
to international shipping lines. She
said the move could help ease the
congestion in Manila’s ports, pave
the way for the development of other
ports, and lower logistics costs.
Under the existing Philippine
Cabotage Law, foreign vessels cannot
ply domestic routes as they are
banned from servicing local ports.
De Lima said the amendment
of the Cabotage Law can improve
the country’s competitiveness
as an investment destination.
PEZA Director-General Lilia
B. De Lima emphasized the
She cited Executive Order No. 172
series 2014 as a good start to open up
T
Leaño said an executive order
(EO) would be enough to require
all investment agencies to submit
investment data and creating the TEA
would be effectively putting a limit
to the incentives that can be given out.
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Vol. 20, No. 05 6
the rest of the local maritime industry
to international shipping. The order
identified Batangas and Subic ports
as extension of Manila’s ports.
The EO provides that when there
is congestion in Manila ports,
3.Workshops to streamline
processing of permits
set for chemical industry
T
he Board of Investments (BOI)
is set to conduct workshops
for the Samahan sa Pilipinas ng
mga Industriyang Kimika (SPIK)
in the first quarter of 2015 to simplify
the processing of applications
for permits.
Under the chemical industry roadmap,
streamlining business processes
is identified as a step in solving
the obstacles faced by companies
in the said sector.
By organizing the workshops,
BOI expects to harmonize the
processes for securing permits,
4.SEC wants higher fines
for disclosure violations
T
he Securities and Exchange
Commission (SEC) is pushing
for more stringent penalties
on firms that provide incomplete
disclosures or misrepresent
information in their filings.
SEC Chairperson Teresita J.
Herbosa said tougher fines would
put more pressure on companies
that conduct and conceal illegal activities.
Consumer News
1.Traders enjoined
to uphold copyright law
IP code violation penalties
Offense Maximum Maximum
number administrative imprisonment
fineterm
First P150,000
Three years
offense
Second P500,000
Six years
offense
Third P1.5M
Nine years
offense
onwards
T
Manila-bound shipments can
be unloaded either through Batangas
or Subic, whichever is geographically
attractive to international vessels.
(MAB 02/01)
licenses, and registration documents
required by the various regulatory
agencies such as:
• Food and Drug Administration
(FDA)
• Fertilizers and Pesticides Authority
(FPA)
• Philippine National PoliceFirearms and Explosives Office
(PNP-FEO)
• Philippine Drug Enforcement
Agency (PDEA)
• Department of Environment and
Natural Resources-Environmental
Management Bureau (DENR-EMB)
• Bureau of Customs (BOC)
(TPS 01/26)
The proposal for higher penalties
and call for stricter enforcement came
after an audit conducted by SEC
which yielded unfavorable findings
against some listed companies owned
by businessman Antonio
Tiu, namely the AgriNurture
Inc., Greenenergy Holdings Inc.,
Sunchamp Real Estate Development
Corp., and Earthright Inc. (TPS 01/27)
hird-party providers such
as property management firms
and internet service providers
(ISPs) are also liable in cases
where their tenants or clients commit
copyright infringement, the Intellectual
Property Office of the Philippines
(IPOPHL) said.
and contribute to the act are counted
as violators of the IP Code.
Under Republic Act (RA) No. 10372,
which amended RA No. 8293 or the
Intellectual Property (IP) Code
of the Philippines, those who gain
from the infringing activities of another
The amendment to the IP Code was
approved by President Benigno
S. Aquino III on 28 February 2013.
The penalty for offenders includes
an administrative fine and
imprisonment with varying amounts
and terms depending on the severity
and the number of violations.
(MST 01/29)
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2. Meralco Power Lab
launched
09 March 2015 7
T
o assist consumers in energy
saving, the Manila Electric
Company (Meralco) introduced
Power Lab, a facility which can
evaluate the energy consumption of
various electrical devices
and appliances.
“We want consumers to visit the
Meralco Power Lab to discover
how much electricity typical
home appliances and gadgets
consume and to realize how
this impacts on their household
expenses,” Meralco Senior
Vice President Alfredo S.
Panlilio said.
The Power Labs’ Equipment Testing
Laboratory examines various
household appliances for their energy
use, while the Demo Area is used
to compare power consumption
of different technologies through
interactive energy display monitors.
The facility also features an Intelligent
Living Space where visitors can see
and experience the latest innovations
in energy efficiency in a simulation
of a residential space.
STATWATCH
USD 16.1B
Revenues
from Philippine
semiconductor
exports
in January-November 2014
EUR 611.8M
Expected exports
revenue to be
generated by PHL
during the first
year of entry to the
European Union’s
(EU) Generalized Scheme of
Preferences Plus (GSP+)
267,587
Jobs to be
generated
by PHL during
the first year
of entry to the
European Union’s (EU) Generalized
Scheme of Preferences Plus (GSP+)
7.9%
Growth of PHL’s
electronics
exports in
JanuaryNovember 2014 from the same
period in 2013
Meralco will also launch its Orange
Tags, or labels to be applied on
appliances sold in stores that will
indicate the item’s energy usage cost.
(TPS 02/01)
8
7
6
5
4
3
2
1
0
GDP Growth Rate (%)
3Q (2013) 4Q (2013) 1Q (2014) 2Q (2014) 3Q (2014) 4Q (2014)
6.1% PHL’s
gross domestic
product (GDP)
growth rate
in 2014
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Feature
PHL’s export to EU
to expand with GSP+
W
ith the Philippines now
included among
the countries that can benefit
from the European Union’s (EU)
Generalized Scheme of Preferences
Plus (GSP+), the Department
of Trade and Industry (DTI)
is expecting to see increased
exports of the country’s major
products to the bloc.
The country’s exports are expected
to reach EUR 611.8M and generate
267,587 jobs within the first year of
qualification to the GSP+.
“For the Philippines to make the
most out of GSP+, it should speed up
procurement processes and increase
production of some of their export
products” Delegation of the EU to
the Philippines Head of Trade
Section Walter Van Hattum said.
Previously, the Philippines
was enjoying the Regular GSP
arrangement on 6,209 products
with zero tariff on 2,442 goods
and a reduction on the duty
on 3,767 products.
ASIA Watch
1.PHL needs to unify
local, national laws
N
ational and local laws
in the Philippines should be
unified in preparation for the
ASEAN Economic Community (AEC),
the Department of Trade and Industry
(DTI) said.
“These are only some of the things
that need fixing before the integration
takes effect,” DTI-10 Regional
Director Linda O. Boniao said.
Boniao cited the need to fix
the laws and policies on local
industries particularly the sugar
and power industries.
She identified the concerns
on investment incentives
Vol. 20, No. 05 8
With the upgrade to the GSP+, a total
of 6,274 Philippine products will have
zero tariffs. (BWD 01/14)
Philippines’ key export products
to the EU aimed for increased
production

Coconut oil
Furniture
Garments
Tuna
Source: DTI
Philippines’ key export products
to EU under the Regular GSP
arrangement

Ballast for discharge lamps
Boards and cabinets for electric
controls or distribution of electricity
 Canned tuna
 Crude coconut oil
 Lenses for spectacles
 Pneumatic tires
 Preserved fruit
Relays

Source: DTI
and legal procedures such as
the law on ownership of investing
foreign firms.
Philippine businesses need
to work together to compete with
their counterparts from other
countries, she added.
“Due to this integration, products and services
within the 10-member Association of Southeast
Asian Nations (ASEAN) can be freely traded
without tariff or visa,” she said.
For instance, she also mentioned,
the merger of Holcim and La Farge
will make the biggest cement plant in
Indonesia, which at the same time has
a branch in Lugait, Misamis Oriental.
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2.PHL, Asia’s 6th fastest
rising urban population
T
he Philippines is Asia’s
sixth fastest growing urban
population, the World Bank’s
(WB) “East Asia’s Changing Urban
Landscape: Measuring a Decade
of Spatial Growth” report showed.
“Urban areas in the Philippines
are among the densest in the region,
and are becoming denser,” the WB
said.
09 March 2015 9
Notably, Metro Manila was listed
as one of the region’s megacities
of 10M or more inhabitants.
“The Manila urban area is the
Philippines’ undisputed prime city,
with no close competitors,”
the WB said.
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A synopsis of selected
book acquisitions
at the DTI-Library
Unless otherwise indicated with a
URL address, copies are available
for loan to DTI employees and for
research purpose only to external
clients. For inquiries/reservation,
please call 751.0384 local 2130 or
email [email protected]
Vol. 20, No. 05 10
Title: East
Asia’s
changing
urban
landscape:
Measuring
a decade
of spatial
growth
Publisher:International Bank for
Reconstruction and Development/The
World Bank Washington, DC, 2015
URL: http://documents.worldbank.
org/curated/en/2015/01/23894228/
east-asias-changing-urban-landscapemeasuring-decade-spatial-growth-vol2-full-report
Discusses the pace, scale, and form
of urbanization in transforming the
developing world. Presents trends
in urban expansion and population
growth in more than 850 urban areas
­—by country, urban area, income
group, and city size categories—
illustrated with maps and charts.
Discusses findings on increasing
urban population densities across
the region and quantifies the
administrative fragmentation of urban
areas that cross local boundaries.
Also discusses implications of the
research and outlines potential policy
options for governments that can help
maximize the benefits of urban growth.
184 pages
Title: A Policy
road map
for export
success
Publisher:International Trade Centre
Geneva, 2014
URL: http://www.intracen.org/
uploadedFiles/intracenorg/Content/
Publications/A%20Policy%20
Road%20Map%20for%20Export%20
Success%20-%20low%20res%20
-%20with%20cover.pdf
This publication aims to push the
analysis in the International Trade
Centre’s (ITC) National Trade
Policy for Export Success (NTPES).
Published in 2011, it assists the
government and the private sector
to understand the factors that
affect export success and design
programmes appropriate
to their circumstances. It attempts
to advance a coherent policy
framework that will help unleash
the export potential of firms through
trade policy. It also sets out a
road map for exporters to become
internationally competitive; includes
bibliographic references. 40 pages
Legend
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