The petitioners for rate hikes, PCCI pointed out, failed to prove that their losses were not the result of mismanagement and mishandling of purchases of fuel like coal at a time under a regime of wild price fluctuations in coal prices.
PCCI has been at the forefront of the advocacy for lower power rates for more than a decade and threw its full support to the Electric Power Industry Reform Act (EPIRA) passed into law in 200l.
The chamber has argued that high electricity rates in the Philippines has jacked up the prices of Philippine goods and undermined their competitiveness in the domestic and foreign markets.
Instead of going down following EPIRA’s enactment into law, electricity rates kept on increasing to a point that with the most recent rate increases, the Philippines may now overtake Japan as having the highest electricity rates in Asia. -- Abe P. Belena, PHILEXPORT News and Features <--back
2. EDC projects below zero export growth this year; spectacular rebound in 2010
After factoring in the impact of the global recession, the semi-government Export Development Council (EDC) this week projected a negative seven (-7) percent growth in exports for the whole of this year.
But it made a fighting target of 16 percent growth next year if and when the government makes good its commitments to back with funding the last two years of the three-year Export Development Plan.
When President Arroyo approved the export plan last year, she promised in principle a national government subsidy of P1 billion to make the plan work.
In its revised export target this year, a copy of which was obtained by the PNF, the EDC conceded that the electronics industry that make up more than half of all exports will suffer a 10 percent retreat from last year’s performance, with target sales of $25.6 billion.
But next year, EDC has targeted a 10 percent rebound for electronics and semi-conductors valued at $28.2 billion. This was premised on the assumption that the recession in its major markets, the US, Japan and Europe, shall have bottomed out by the end of this year.
The country’s number two export, automotive parts, is seen by EDC to experience zero growth this year on revenues of $3 billion, but will bounce back next year by two percent on the back of targeted sales of $3.06 billion.
The third top export, garments, was seen to dive by 25 percent this year from $2.29 billion in export sales last year to $1.72 billion. Seventy percent of Philippine garments end up in the United States.
Next year, the EDC made a fighting target of 3 percent growth for garments with projected sales reaching $1.77 billion.
Fresh, frozen and processed food, the country’s fourth biggest export product, was seen to defy the global slowdown and will post a 10 percent growth on the back of double-digit growth in tuna and other fishery exports this year with $2.5 billion in targeted export sales.
EDC sees an even heftier growth in food exports next year with marine products seen to push up sales by 40 percent, fresh fruits led by bananas, pineapple and mangoes at eight percent, and processed food at 10 percent spikes.
Total revenue target from food next year was pegged at $3.4 billion.
Furniture, home furnishings and other handicrafts, the country’s fourth biggest export cluster, was seen to go flat or negative this year with sales duplicating last year’s $1.2 billion.Target for next year was a maximum of 10 percent growth.
Mineral products including gold, silver, copper, nickel and chromite are also seen to decline by 51 percent or by more than half this year from last year’s $2.4 billion to $1.22 billion. It is seen to rebound to $1.7 billion in 2010 on the back of a projected 40 percent growth, year on year.
The two other big export items, coconut products and petroleum, are expected to continue growing at double-digit rates between now and next year to contribute $2.5 in export revenues by the end of 2010. -- Abe P. Belena, PHILEXPORT News and Features <--back
3. RP needs to upgrade technical infrastructure to hurdle more barriers to trade
The Philippines needs to upgrade its technical infrastructure and other standards to levels accepted by the international community for more exporters to be able to hurdle non-tariff measures by importers.
This was one of the conclusions that resulted from a recent presentation of a study on non-tariff measures (NTMs).
The study on experiences of Philippine export enterprises in dealing with NTMs was made by Gloria O. Pasadilla, senior research fellow of the quasi-government think-tank Philippine Institute of Development Studies (PIDS). Surveyed were 303 export enterprises mostly small and medium enterprises.
The Philippine study was part of a larger study on the impact of non-tariff barriers and measures on the exports of seven developing countries. The Philippine companies said they had frequent encounters with technical barriers to trade (TBTs) that cover non-food products or sanitary and phytosanitary (SPS) measures that involve agri-based and food items. Some of these recent requirements include fumigation of wooden crates, radiation tests, certifications for use of sustainable wood, ban on the use of formaldehyde in wooden products, lower chemical residues in food, etc.
Administration and regulation of TBTs is handled by the Bureau of Product Standards of the Department of Trade and Industry, while SPS is an area for the Department of Agriculture.
Philippine export companies revealed they experienced a total of 860 cases of non-tariff measures. Close to half (45%) or exactly 370 of these were TBTs, while 31 percent fell under SPS measures. SPS standards assure the safety of food products for human consumption.
Surprising the researcher was the fact that 86 percent of the exporters said they were able to hurdle those non-tariff measures, but they did not say at what cost. Pasadilla mentioned that to continue their business, exporters possibly shifted to markets with less stringent requirements.
But as NTMs multiply, some of which are perceived to be non-tariff barriers already, exporters have been urging government to facilitate the development of the technical infrastructure needed for lower-cost and easier compliance to global or country standards.
This includes standardization, testing (there are not enough laboratories), accreditation and metrology (to harmonize local measurements internationally).
This gap has prevented most players in the organic and local food sectors, for example, from exporting their products. The cost of getting international certification of each product line, mostly done by certifying bodies in other countries, has proven to be very prohibitive for SMEs. -- Abe P. Belena, PHILEXPORT News and Features <--back
4. N. Mindanao exporters see decline in sales but likely to keep workers
Northern Mindanao exporters are experiencing declining sales in th first quarter of 2009 as a result of the global financial crisis, but they opt to maintain their workers in line with efforts to sustain business viability.
This was revealed by results of a survey conducted by the Confederation of Philippine Exporters Foundation Region 10 Chapter, Inc. with their key members on the impact of the economic crunch on their businesses.
Twenty five exporters in the wood; food; gifts, toys and housewares (GTH); industrial manufactures and services sectors out of their total 100 members responded to the survey.
“Volumes are declining but orders still keep on coming,” according to the industrial goods manufacturers.
But despite lower sales from existing clients, exporters in the services sector bared that potential clients are increasing. There are also new entrants in the sector, they pointed out.
Exporters also revealed plans to maintain their manpower to keep their businesses running despite the impact of the United States-spawned global crisis.
“It is not a good time to retrench, crisis or no crisis. It is very hard to look for good skilled labor,” said the wood exporters, adding they would decide within the month whether retrenchment is necessary.
On the other hand, offices in most services providers are already lean and as such, the number of workforce can no longer be slashed further.
Apart from measures to help the industry ride out the crisis, food exporters cited the need to reduce the cost of doing business in the country.
“It is the high cost of doing business, inadequate government services and low productivity that are keeping the business from growing both in good and bad times,” they said.
This view was shared by GTH exporters, noting, “it is not a question of crisis as markets can always be developed, the problem is still raw materials and cost of doing business.” -- Danielle Venz, PHILEXPORT News and Features <--back
5. BPO players undertake priority talent development projects
Key players in the Philippine business process outsourcing (BPO) industry are aggressively implementing priority talent development projects crucial to achieving the industry’s growth targets this and next year.
“Talents remain to be top priority of the industry. How the industry will grow depends on how much qualified talents we can produce,” said Ma. Jamea Garcia, executive director of Talent Development Business Processing Association Philippines (BPAP), in a recent employment summit.
Garcia identified these talent development initiatives as the Advanced English Proficiency Training (ADEPT), the National Competency Assessment and Certification Program, the Pangulong Gloria Scholarship (PGS) and the Training for Offshoring and Outsourcing Leadership Program (TOOL).
The ADEPT program was designed to improve the English proficiency of college students to a level acceptable for employment in BPOs.
Garcia said this can be done through leveraging existing assessment and training modules used by BPAP member firms and/or Coordinating Council of Private Educational Associations (COCOPEA).
“For school year 2009, we want to end up with about 5,500 ADEPT graduates. In 2010, we want to increase it to 25,000 graduates,” she said.
Garcia said the National Competency Assessment Program aims to develop a competency assessment test designed for graduating college students and career shifters who would like to work in the BPO-information technology industry.
She explained that such assessment test will help the schools develop and design curriculum acceptable to industries.
“For BPO-IT companies, recruitment cost would be cut because the selection will be targeted to those who possess the specified ratings for the particular competencies that the companies require,” she added. “For the students, this will help them determine the areas they would need to work on if they are targeting a career in the BPO-IT.”
Garcia said an initial 10,000 test pins to be used for the pilot testing in schools are being evaluated by BPAP.
She said 10 universities will commence the roll out of the assessment test program this coming school year, while the phased national roll-out was set for school year 2010-2011.
Garcia added the PGS, formerly named PGMA Training for Work Scholarship Program, subsidizes the “near-hire” training of applicants into the BPO-IT.
She said budget for training subsidies has been increased to P350 million in 2009 from last year’s P260 million.
With the new budget for this year, over 60,000 trainees are expected to benefit in the call center, software training, transcription and animation trainings, Garcia said.
“For 2009, in addition to reimbursement for the tuition fee, students will be given a daily allowance (training support). In addition to the vouchers, the training support and assessment will also be distributed through BPAP,” she said.
Garcia said as of January 23, 2009, employment yield rates for call centers reached 65 percent, medical transcription at 86 percent, and software and animation, at 100 percent each.
She said the industry is also undertaking the TOOL management development program intended to increase the number of capable managers for the BPO industry.
Garcia said they expect to graduate 150 managers this year, noting “Our industry is people-centric, we need to constantly develop people. Because the industry is fast growing, we need to develop managers aside from entry level positions.”
Apart from the four talent development initiatives, Garcia said industry players are also prioritizing the BPO Investment Missions and Conferences.
“We need to market the Philippines as a primary outsourcing destination of choice for companies,” she said.
The BPO industry is projected to post a growth of 20 to 30 percent this year and 45 to 50 percent in 2010 from 2008’s 26 percent. -- Danielle Venz, PHILEXPORT News and Features <--back
6. RP must work outside WTO in aggressively pushing services exports -- DFA
The Philippines will be banking on bilateral and regional services agreements to sustain its services trade development and promotion given the impasse in the World Trade Organization (WTO) negotiations.
In a forum, Department of Foreign Affairs Undersecretary Edsel Custodio said there is still no development in talks for mode 4 framework under WTO’s General Agreement on Trade and Services (GATS) which allows the movement of natural persons across borders.
“In fact, in some seminars in Geneva where we discussed mode 4, it was accepted that mode 4 cannot be resolved by the WTO. We cannot move mode 4 in the WTO. Rather, we should do this through other fora,” he said.
The Philippines is now the world’s top exporter of warm bodies, having deployed 8.9 million professionals and highly skilled workers in over 200 countries worldwide. WTO negotiations, have, however, bypassed discussions on any multilateral rules on that mode of export.
Custodio identified the alternative approaches as the ASEAN Framework Agreement on Services (AFAS), the APEC Services Initiative, RP-EU Partnership and Cooperation Agreement, and even the “new generation” agreement like the Japan-Philippines Economic Partnership Agreement (JPEPA).
He particularly cited the Mutual Recognition Arrangements (MRAs) under AFAS which enable the qualifications of professional services suppliers to be mutually recognized by ASEAN partners.
Engineering, nursing, architectural and surveying qualifying services have been accepted in the ASEAN region, he said, adding that accountancy, medical and dental practitioners are also expected to achieve MRAs this year.
Custodio said the APEC Services Initiative likewise develops a framework of services principles to facilitate cross-border services. Such initiative was proposed by Australia and the United States during the Senior Officials Meeting in Singapore last month.
“We are supporting this because I think, this is a way of connecting with the appropriate services authorities in the APEC region to be able to work on better flow of services, investments and services trade,” Custodio said, as he expressed hope it may also pave the way for allowing the movement of natural person across borders.
On the other hand, the Philippine cooperation agreement with the European Union promotes access to sources of capital and technology, and trade and services between the two countries.
Likewise, Custodio said the country can use its bilateral arrangements with Chinese Taipei on the development of the Kaohsiung-Subic-Clark economic corridor to boost its services trade.
“We will open up the export processing zones between the Chinese Taipei and the Philippines to (introduce) free movement of labor,” he noted.
Custodio noted that services play a crucial role in advancing the economy. It accounted for almost 54 percent of the country’s gross domestic product in 2008 and employed 47 percent of Filipinos. -- Danielle Venz, PHILEXPORT News and Features <--back
7. Exporters exploring new uses for native raw materials to stay afloat
Handicraft exporters are now exploring new applications for native raw materials and technology.
This is one of the interventions identified to minimize their input costs and retain the country’s remaining advantage – creative designs through the use of indigenous materials.
Amidst the current call for support from the government to upgrade the capability particularly of handicrafts exports, a program to identify new raw materials from the regions and study possible manipulation and application to make products less costly has been initiated. This is a joint project of the Department of Trade and Industry, through the Bureau of Domestic Trade (BDT) and Cottage Industry Technology Center (CITC) in collaboration with the Philippine Chamber of Handicraft Industries (PCHI).
Approximately, 14 new material applications were developed through the program dubbed as the “Material Application and Manipulation (MAM) Project”. Suppliers of these new uses of abundant native materials will be presented in the showcase.
New uses for abaca, pandan, capiz, labtang, tobacco plant, bamboo, palma brava and water lily, among others, are being showcased at the National Trade Fair at the SMX Convention Center, SM Mall of Asia, Pasay City from March 12 to 15.
Through this program, exporters will be able to explore alternative applications for new product lines to lower their cost of inputs and help them stay afloat in the market considering the current crisis. -- Salvio Valenzuela, PHILEXPORT News and Features <--back
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