In a recent interview with the PNF, PHILEXPORT President Sergio R. Ortiz-Luis, Jr. had said that one of the quick-wins the export sector is going to submit as project under the new administration is the institutionalization of the ESF allocation.
The export leader suggested that beginning in the next budget year, the sector will be lobbying for the inclusion of the ESF funds in the regular yearly budget of the Department of Trade. -- Abe P. Belena, PHILEXPORT News and Features <--back
2. Investments to sustain rapid growth of electronics exports SEIPI
The impressive rebound of the electronics industry can be driven into sustained high growth if the country embarks on an aggressive investment promotions campaign aimed at luring in the big multinationals to locate in the Philippines.
This view was shared by Semiconductor and Electronics Industry in the Philippines, Inc. (SEIPI) president Ernie Santiago and chairman Arthur Young in a press conference on the side of this year's version of the industry's yearly trade exhibit at the SMX convention halls in Pasay before the weekend.
“The multinationals are now reviewing their global strategies and they are determined to make a presence in Asia,” Santiago said.
“They realize that China is not the only player. The reality is, the China plus plus scenario is at work and the Philippines must be made part of the investment destinations,” Santiago explained.
He explained that we must take full advantage of the smooth transition of government we recently pulled off while Thailand is still struggling to form a new government.
“You must get out and get the investments,” echoed chairman Young. “It all redounds to investments. If you order new machinery for added capacity today, it will be six months before it gets delivered, and two years to reap the higher growth. Texas Instruments (TI) decided to expand in Clark in 2007. It is reaping the dividends this year.”
The electronics industry leaders further pointed out that the spectacular growth of their industry in the 1990s that peaked at US$2.16 billion in 1995 fueled double-digit annual growth in export. This sector propelled to be the country’s leading export and since then captured at least 60 percent of total export revenues.
Investments slowed down in the past decade but jumped again to $1.4 billion in 2007 on the back of the decision of TI to put up its new manufacturing facilities at the Clark Freeport.
At the rate the industry has been recovering, its leaders expect exports this year to edge the performance in 2008 at $29 billion yearly sales. Their previous projection is a growth of about 29 percent this year which actual figures in the first four months have been revising upwards.
“A 45% growth will overtake exports of $31 billion in 2007 which may not yet be attained,” Santiago said. Robust growth is still expected next year but may not be as spectacular as this year due to under capacity of the local plants.
SEIPI also reported that the industry has employment totaling 460,000 regular workers in 2007. This year, the industry has more than regained its previous work force to 473,000 people.
Atty. Lilia de Lima, director general of the Philippine Economic Zone Authority (PEZA), suggested that for new investments to pour into the country, the private sector must work in tandem with government in launching and sustaining an aggressive investment promotions campaign.
At the height of the global recession, SEIPI submitted a proposal to the Export Development Council to embark on a high-profile investment promotions campaign via the international broadcast media. The project was supposed to be funded from part of the P1 billion export support fund made available by President Arroyo. -- Abe P. Belena, PHILEXPORT News and Features <--back
3. LLDA campaigns to plant bamboos, putat trees to save Laguna Lake
There are more than 10 little known waterfalls that feed their waters into the Laguna de Bay and somehow make its waters a bit fresher. But deforestation of the bay's huge watersheds are threatening to dry those potential tourist spots of their waters.
Environment concerned companies, particularly exporters, may now adopt a waterfall to protect and care for.
Or one could fund a plantation of kawayang bayog or kawayang tinik in one of the bald mountains that are contributing to the flooding first seen to submerge delta villages at the banks of the lake.
Another option is for a company to bankroll the restoration of the mangrove forests along the embankment of waterways from the lake to Manila Bay with a variety of mangrove tree called putat which is native to Laguna Lake.
Laguna Lake Development Authority (LLDA) head Ed Manda recently made a presentation on the extent of destruction of the resources that sustain the lake.
Manda revealed that the damage came from land developers that have converted into subdivisions parts of the denuded watersheds on the mountains of Rizal and squatters that have clogged the waterways with trash, complete with photos of flooded areas at the height of typhoon Ondoy.
He admitted that the situation surrounding the lake is in such emergency situation that neither the national government nor LLDA can rehabilitate the water body on their own, as it will require immense resources.
He said his office has made extensive studies on the situation and came up with a community-based, multi-sectorally supported, and comprehensive rehabilitation program.
“We are not limiting ourselves on projects that are simply supported by private companies. We are also encouraging individuals and companies to go to plantation farming,” he added.
He particularly encourages people to go into bamboo plantations. The motivation came from the results of a study LLDA made in China that indicated huge commercial prospects of bamboo-based products such as bamboo shoots that can be turned to food, juice extracts to a variety of industrial products.
He expressed no fear that the expected end of his term as a presidential appointee may again derail the continuity of the lake's rehabilitation. A private foundation with the same objectives has been set up to continue the work. -- Abe P. Belena, PHILEXPORT News and Features <--back
4. Make AANZFTA effective, RP told
Businesses and government are advised to undertake various efforts to effectively tap the ASEAN, Australia and New Zealand (AANZ) markets as the AANZ free trade area agreement enters into force.
Citing Bureau of International Trade Relations (BITR) data, Ganeshan Wignaraja, principal economist of the Asian Development Bank (ADB), noted that the AANZFTA would benefit Philippine exports and investments and provide job opportunities as well.
He said such benefits include zero tariffs for all products exported to Australia and New Zealand by 2020 with a phased tariff elimination scheme, greater two-way trade, enhancement of investment promotion while protecting sensitive industries, and provision of broader market access and opportunities for Filipino professionals and skilled workers.
Philippine top exports to Australia are crude petroleum, electronics, copper and telecommunications equipment. On the other hand, its chief shipments to New Zealand are fruits, mineral fuels/oils and electronics.
With the growing economic ties between ASEAN, Australia and New Zealand, the “AANZFTA is a key vehicle for mutual gains”, Wignaraja said in a business forum.
To fully exploit these opportunities, companies were told that they need to learn about FTAs and incorporate FTAs into firm-level business strategies.
Wignaraja said they should conduct more outbound missions to ASEAN, Australia and New Zealand and develop business links with their business chambers.
Businesses must also promote links into industrial supply chains in ASEAN and forge tie-up with services value chains like education, information technology, business consulting and financial services, he added.
Moreover, the economist urged the government to continue deepening FTA-led integration to achieve Comprehensive Economic Partnership for East Asia (CEPEA) and broaden Trans-Pacific Partnership Agreement (TPP). TPP is a platform for trade reform in the Asia Pacific.
Wignaraja said it also needs to raise resources for FTA-supporting institutions.
This will enable them to increase information about FTAs and investment regulations in ASEAN, improve surveillance of non-tariff measures and provide more integrated supply-side support for upgrading and linking to supply chains, he pointed.
Wignaraja said the government must coordinate and implement capacity building especially for Cambodia, Malaysia, Laos and Vietnam. -- Danielle Venz, PHILEXPORT News and Features <--back
5. EU GSP should facilitate more exports from developing countries
EU GSP should facilitate more exports from developing countries.
This was stressed in a position paper by EuroCommerce, a group representing the retail, wholesale and international trade sectors in Europe, in a Business Briefing published by the International Trade Centre (ITC).
The recommendation was made as the European Commission is preparing the next European GSP 2012-2015.
“If the aim is to provide incentives to stakeholders to increase trade against the backdrop of preference erosion, the system must be even simpler, easier to apply, more predictable and give traders more legal certainty,” the EuroCommerce stressed.
It said European GSP should be continued, noting it is a “very important tool for development”.
Without the GSP and the advantage to import duty free, many importers may have opted to place their orders in China rather than less developed countries due to price consideration factor, it reasoned.
The group also underscored the need for a well-functioning system that is part of the Millennium Development Goals.
EuroCommerce believed that the EU GSP could contribute to the reduction of poverty in developing countries by generating revenue through international trade and giving support to sustainable development and good governance.
“Obviously, without placing orders in such countries, European importers are not in the position to monitor and to improve the social performance of their suppliers,” it noted.
But to ensure the effectiveness of the next GSP, it should contain simple rules. It is thus important not to overload the scheme with other intricate issues.
“Already in its current shape, the GSP is not easy to understand for economic operators. This goes especially for exporters (producers) in the beneficiary countries,” it added. “EuroCommerce is afraid that inclusion of additional complex issues like food security would make the GSP more complicated and, hence, less effective.” -- Danielle Venz, PHILEXPORT News and Features <--back
6. Passage of data privacy bill that supports APEC privacy guideline pushed
Business process outsourcing (BPO) industry players are asking Congress to pass a data privacy bill that supports the APEC data privacy guideline.
“On the principle espoused by the APEC privacy guideline which the Australia and New Zealand actually embraced, the Philippines along with ASEAN would like to embrace those as well,” said Oscar Sañez, the chief executive officer of the Business Processing Association of the Philippines (BPAP).
In an ASEAN-Australia-New Zealand Free Trade Area (AANZFTA) business forum, Sañez said such legislation could be anchored on the principles of continuous data flows and protection of data breaches.
“I think for the markets to fully trust offshoring and outsourcing services, there has to be a guideline institutionalized on data privacy,” he explained.
Sañez said key stakeholders support the APEC privacy principles.
“It is not called out very specifically in the provisions of the FTA but this is an extension of E-Commerce Law that is quiet important for this sector,” he noted.
Apart from this effort, Sañez said the sector is strongly supporting investment protection, particularly in the information technology (IT) sector.
This is the reason that the country has developed incentive programs related to IT investments, he noted.
Sañez earlier said BPAP was also working with the government on strengthening the intellectual property law. -- Danielle Venz, PHILEXPORT News and Features <--back
7. Stakeholders ambivalent about services and investment pact with India
Stakeholders are ambivalent about allowing Indian workers and investments to enter the country on preferential terms.
This was the sentiment expressed by the stakeholders during the recently held stakeholders’ consultation meeting organized by the Department of Trade and Industry (DTI).
Based on the unofficial position paper of the Department of Labor and Employment (DOLE), the agency perceives the Indian market as unattractive for Filipino workers and companies as both are labor-sending economies and are competitors in the provision of various services, notably business process outsourcing.
The construction sector is not keen on entering the market given that the construction business there is owned and managed by the Indian government.
There are currently 15 Indian companies operating in the country, while there are five Filipino companies doing business in India.
Philippine negotiations disclosed that the Indian government has already made requests in the areas of business services, communication services, construction, education, environment, health, recreation, tourism and transportation.
Without concessions to offer yet, the Philippine government limits its request to financial services. It indicated, however, that the country may benefit from having Indian companies invest in the country’s pharmaceuticals, hospitals and other medical services.
After conclusion of the Free Trade Agreement on Trade in Goods in August 2009, ASEAN and India are currently negotiating on agreements on trade in services and investments under a request-offer basis.
The Investments Agreement covers the extent of protection given to foreign investors and investments, while the Trade in Services Agreement includes national treatment, domestic regulation, and mutual recognition, among others. -- Ritchelle Alburo, PHILEXPORT News and Features <--back
