The two-year suspension of the volume of export requirement and the Export Recovery Projectsare based on our experience that it took the export industry three years to surpass the pre-crisis level of exports following the 16% slump in 2001,Leano said.
The suspension is likewise meant to provide exporters fiscal incentives to launch export promotions projects in Asia, the Middle East and other territories where the Philippines has little or no presence until today.
Finally, suspending the 70% export threshold will give more teeth to the inclusion of exporters in this IPP list, since otherwise, exporters will not qualify for the incentives anyway due to the trade slowdown.
The BOI official said that the incentives are now in effect after it was approved by outgoing President Gloria Arroyo. -- Abe P. Belena, PHILEXPORT News and Features <--back
2. Economist pushes rehab of stagnant industries
The industrial and manufacturing sector has stagnated in the last 20 years. They must be revived fast to get the Philippines back on track in the race for progress in Asia. Some are now extinct.
This is a key reason why the Philippines has been left behind in the race to lick poverty in the rapidly industrializing Asian region.
This was the core message of economic professor Myrna V. Austria in a forum entitled Mobilizing for a Decade of Development organized and held at the main campus of the De La Salle University yesterday. This forum marked the launching of its College of Business and School of Economics.
Austria is the chancellor for academics and research of De La Salle.
The poor performance of local factories and industrial plants, Austria pointed out, lies on the low value-added of products they make, lack of specialized skills of workers in their employ and little investments in research and development.
The incoming Noynoy Aquino administration can make quick wins if it takes decisive actions on several fronts to reverse the trend.
The first step, the economic professor suggested, is for the new government to strengthen the human development side of industrial development. This will entail strong collaboration between the surviving industries, the government and educational institution in training new professionals needed by industry especially in advanced engineering.
It should also adopt an incentives program to reverse the brain drainor the exodus of the best and brightest professionals and highly skilled Filipino workers to jobs abroad.
The government and educational institutions must also change their mindset to favor vocational and technical courses offered by them.
There has been a bias against technical and vocational courses and that must be reversed,she stressed.
More investments too are needed in technical training to prepare the young in manning the 21st century factories and industrial plants.
At the same time, the economist said that the next administration should further improve the investment climate by building critical infrastructure like modern seaports and airports and land transportation networks, build a strong trade and investment facilitation system and practice good governance through transparency and the rule of law.
In the investment front, Austria suggested that the private sector must take the lead at investing in research and development to create new and high-value products and processes like what Korea, Singapore and more recently, Malaysia and Taiwan did.
She also recommended strict enforcement of the intellectual property rights law for new products and processes and the country to adopt a common framework in negotiating free trade agreements. -- Abe P. Belena, PHILEXPORT News and Features <--back
3. BOC collects P279M in importers fines for misdeclarations
Importers will just have to be extra careful and truthful.
A number of them shelled out P279 million in 2009 to the Post-Entry Audit Group (PEAG) of the Bureau of Customs (BOC) from errors discovered in the import valuation of some 84 companies audited by the Group.
Companies for audit were selected from sectors with high import values where customs compliance was perceived as low and where under valuation and fraud were most likely to occur.
The amount was almost double the P142 million that the PEAG collected in 2008. It resulted from price adjustments in imports of the food and beverage industry, correction of under-valuations in the oil and fuel business, and inclusion of the cost of royalties and correction of misclassifications in both sectors and in personal care products.
For deficiencies in duties and taxes paid for imported goods, a fine of up to twice the deficiency may be charged for simple negligence, up to four times for gross negligence, and up to eight times for fraud. If no records of an importation are kept, a fine of up to 20% of the value of the importation can be applied.
PEAG officer-in-charge Assistant Customs Commissioner Atty. Rolando T. Ligon Jr. said the amount represented less than one percent of total customs collections, but was achieved despite being understaffed. Thanks to technical assistance from the Japan International Cooperation Agency (JICA) and Japan Customs.
With proper staffing, he claims the Group can achieve a revenue target up to three percent of customs collections, similar to the target set by the Bureau of Internal Revenue (BIR) for their post-audit group. With Philippine implementation of the Revised Kyoto Convention (RKC), import clearances are expected to be faster and post-entry audit coverage to be wider.
The RKC, the blueprint for harmonized Customs practices worldwide, was ratified in February this year by the Philippine Senate, making the Philippines the latest country to accede to the Convention.
Atty. Ligon advised importers to read their recent primer on the BOC post-entry audit system to be aware of record-keeping requirements under the law, familiarize themselves with common audit issues encountered by BOC, and to understand the processes and procedures of the audit. He also urged participation in a Voluntary Disclosure Program through which firms can disclose errors or innocent mistakes and may only have to pay the deficiency duties and taxes and avoid fines and penalties. User trainings on customs post-entry audit will be conducted by the PEAG starting next month.
The PEAG was formed in 2003 under Executive Order 160 in furtherance of Republic Act 9135 that implemented Philippine commitment to the World Trade Organization (WTO) Customs Valuation Agreement. Its first three years of learning the ropes generated about P30 million revenues. Improvement of the selectivity process in 2007 started revving up the Groups collections.
The PEAG consists of two offices: the Trade Information and Risk Analysis Office (TIRAO) and the Compliance Assessment Office (CAO). TIRAO gathers and analyzes firm and industry information forming part of the audit selection process. CAO conducts the field audit of selected importers, with authorization provided by an Audit Notification Letter (ANL) through which the importer is notified of, among others, the period covered by the audit and the composition of the customs audit team.
The selection of auditees take into account, among others: the relative magnitude of customs revenues from the importer; rates of duties of the importation; compliance track record of the importer; and complaints, derogatory information, or directives from other government agencies. PEAG will soon also prioritize sensitive products identified by business for potential under-valuation such as steel and resins. -- Gerardo R. Anigan, PHILEXPORT News and Features <--back
4. ASEAN challenged to penetrate New Zealand market
ASEAN countries are encouraged to increase their shares of the NZ$65-billion retail market of New Zealand as their free trade agreement with that country and Australia takes effect.
The ASEAN countries are a significant exporter of consumer goods to New Zealand,noted Stuart Walbridge, chairman of the ASEAN New Zealand Combined Business Council, in a business forum.
Walbridge said major ASEAN consumer goods exports to that country are trucks and vans, television receivers, computers, furniture, washing machines, bananas and plastic articles.
He said some sectors also have shown significant growths in the past two years such as washing machines, television receivers, computers, bananas and plastic articles.
Walbridge stressed that global tariffs are no longer regarded as a barrier to entry of offshore merchandise to the New Zealand market.
He noted that most tariffs are currently below 10 percent. But rates applying to imports of textiles, clothing and footwear remain at 10 percent.
The current government has frozen current global tariffs until 2015,he related.
However, remaining import duties for merchandise from the ASEAN countries will be reduced pursuant to the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) that came into effect this year, he added.
To effectively penetrate New Zealand, Walbridge advised ASEAN trade officials to conduct more regular visits to that market.
He said ASEAN countries should consider establishing their own stand alone office in New Zealand and send more regular trade missions there.
They could also invite New Zealand retail buyers to attend offshore trade fairs in the various ASEAN countries.
New Zealanders who have money to spend are placing increased emphasis on the importance of quality and durability in the range of consumer goods that they purchase and provided this is recognized by ASEAN producers, then, they are well placed to increase their share of the New Zealand market,he said.
Moreover, Walbridge said ASEAN can use their trade officials and embassy officials to assist them.
They can likewise seek the support of New Zealand-based trade associations such as the ASEAN New Zealand Combined Business Council, Import Institute and NZ Retailers Association. -- Danielle Venz, PHILEXPORT News and Features <--back
5. Other robust markets open for Cebu furniture makers
Cebu furniture exporters are advised to exploit other robust markets to reverse the 13-percent export decline to $6.5 million in March from previous months $7.4 million.
In a report, Benjamin Chiu, market analyst of iSEARCH Philippine Exporters Confederation, Inc., said Japan, South Korea, Australia and Saudi Arabia are their best markets.
Exports to these markets have consistently been growing from January to March 2010,he noted, citing Saudi Arabia as the fastest growing market.
Data indicated that Cebu furniture exports to Saudi Arabia tripled in March to $170,000 from $38,000 in February.
Exports to this country averaged a whopping 182.6 percent, much higher compared to an overall 19-percent monthly growth during the first quarter of the year.
Nonetheless, the United States remained the largest market for Cebu furniture exports from January to March cornering $12 million or 64 percent of total exports.
Other markets were Japan, the Netherlands, Ireland, Germany, South Korea, the United Kingdom, Italy, Australia and Saudi Arabia with shares of less than five percent of total exports for the same period.
Other furniture classified under HS code 9403 was the most saleable product commodity in the first quarter amounting to $14.9 million or 78 percent of the total Cebu furniture exports, while the remainder was covered by HS code 9401 (seats).
Monthly export growth rates of HS codes 9401 and 9403 for the period January to March averaged at 6.2 percent and 27.3 percent, respectively, the same data showed. -- Danielle Venz, PHILEXPORT News and Features <--back
6. Jewelry assaying trainings slated
Around 18 jewelry manufacturers will receive training on jewelry appraisal as the P3.53-million assaying and hallmarking laboratory project gears up for its full operation.
The laboratory designed to determine the quality of Philippine-made gold jewelries was opened at the Cottage Industry Technology Center (CITC) in Marikina City last April. It is a joint project of the CITC and the Guild of Philippine Jewellers, Inc. (GPJI).
It is not yet in operation. We are now conducting proficiency test run of the machines. We will also carry out jewelry assaying trainings for the manufacturers,bared Heide Torrecampo, the account officer of the jewelry center.
Three training batches with six participants each will be held on June 23-24, July 1-2 and July 8-9, she said.
Torrecampo explained that three analysis tests for each sample are required to determine fees for testing and hallmarking. Such tests conform to the Philippine National Standard on jewelry.
The GPJI members have been urging the government to make such jewelry tests mandatory.
The Bureau of Product Standard (BPS) however maintained that tests would be only mandatory if products are proven to be life-threatening.
With this, they will determine the possibility of undertaking efforts to refute such claim.
We are about to have guild elections and the new board will decide,said GPJI President Mia S. Faustmann.
Faustmann earlier said the assay office will provide all stakeholders a way to check the fineness of metals.
In the long term, it will help Philippine exports because exporters can regularly test what they ship, she said.
The assaying center was one of the projects funded under the P280-million Export Promotion Fund (EPF) of the government. -- Danielle Venz, PHILEXPORT News and Features <--back
7. CSOs, business groups back revival of anti-smuggling bill
The revival of anti-smuggling bill figures prominently in the legislative agenda of civil society organizations (CSOs) and business groups.
CSOs and business groups expressed undivided support for the revival of anti-smuggling bill during the Consultation on the Trade Legislative Agenda for the 15th Congress.
Integral to this legislative measure are declaring smuggling as a heinous crime, imposing higher penalties and adopting risk customs and valuation measures used by developed economies.
In the past six years, the International Monetary Fund (IMF) records showed a total of $45 billion worth of imported goods entered the country annually, higher than $32 billion worth of imported products recorded by the Bureau of Customs (BOC).
Given the $13 billion worth of imported goods that the BOC failed to account for, the government lost about P125 billion in VAT and duties yearly.
Aside from suffering huge revenue losses which could have been used to finance various development projects and obliterate the need for new tax measures, illegal duty-and tax-free entry of goods have pushed a growing number of local industries, particularly the micro, small and medium enterprises (MSMEs) to the brink of extinction.
Mars Mendoza of Free Trade Alliance (FTA) noted that it is very important for the country to have an anti-smuggling law at the soonest time possible to effectively deter smuggling as smuggled goods in the country continues to rise.
Aside from anti-smuggling bill, the CSOs and business groups are one in pushing for the Creation of a Philippine Trade Representative Office that will define more clearly the development framework and priorities of the countrys trade policies and ensure policy coherence.
The consultation aims to facilitate a more coordinated policy advocacy campaign and monitoring. It was organized by the Philippine LegislatorsCommittee on Population and Development in partnership with FTA and participated in by the Federation of Philippine Industries, Philippine Chamber of Commerce and Industry, Initiatives for Dialogue and Empowerment through Alternative Legal Services, Inc. and PHILEPORT, among others. -- Ritchelle Alburo, PHILEXPORT News and Features <--back
