Welcome to Philippine Exporters Confederation, Inc.

August 14, 2009

1. Authorities not fully capable of assuring safety of food eaten by Filipinos

The seemingly fresh and shiny fish one buys in the wet market may have been soaked in formaline, the chemical used in preserving corpses.

Or the flawless green vegetable sold in the market is most likely bombarded with cancer-causing pesticide.

These dangerous facts surfaced during the open forum in an orientation course on agriculture, sanitary and phytosanitary standards (SPS). These are measures to which signatories to international trade agreements like the Philippines need to apply for their food exports to be acceptable in other countries.

The absence of adequate safeguards for imported and locally-produced food was traced to the scarcity of modern laboratory facilities in the country, inadequate technical people to handle the job and the lack of the appropriate regulatory mandate in a number of agencies with otherwise overlapping functions.

Laboratories are needed to test if pesticide residues are at dangerous levels in fruits and vegetables or to find out if disease-causing organisms have attacked fresh and frozen food, or if eggs of transferable pests like fruit flies are in fruits. The few existing testing facilities are unfortunately concentrated in Metro Manila where crops are not raised, while absent in regions whose main economic activities are farming and fishing.

This is true in the country despite the presence of 11 different government agencies tasked with regulating the imports and sale of food for public consumption.

Food exports are much safer, the exporters testified, because these agencies have no choice but to assist exporters comply with the standards of the importing countries. Otherwise, these exports run the risk of being impounded or destroyed at the ports of entry.

One banana exporter from South Cotabato testified that in his province, the Bureau of Plant Industry (BPI) lacks the manpower to certify if banana exports to Japan are indeed subjected to the right treatment.

As a result, banana exporters in Cotabato had to shell out cash to get inspection certifications on the treatment of their produce despite the absence of actual inspection.

In the case of imported food products, a lot of these are technically smuggled due to repeated use of a single import permit or due to cargoes escaping the scrutiny of food inspectors with the alleged connivance of customs people, reported by a couple of workshop participants.

This has resulted in the proliferation of untested onions, garlic and carrots brought in from neighboring countries.

A leader of the hog raising industry also in Mindanao said that industry leaders in the southern island banded themselves together to set up their own safety and health standard patterned after that of Singapore because the government could not provide such services.

Participants to the orientation course organized by the Philippine Chamber of Commerce and Industry’s think-tank group, U-ACT, were one in suggesting that industry organizations led by PCCI should initiate dialogues with key agriculture and trade officials and also with trading partners to bring local food standards at par with international standards and regulatory practices.

They said the different industry groups are willing to work with government to come out with credible food safety standards and practices that will not only make their products internationally competitive but will make sure that what local consumers buy will keep them from getting sick. -- Abe P. Belena, PHILEXPORT News and Features <--back

2. Customs bureau recognizes exemption of exporters from engaging brokers

The long standing conflict between exporters and the Bureau of Customs (BoC) over a law requiring all export and import documents to be exclusively signed by a licensed customs broker has been decided in favor of exporters.

Customs Commissioner Napoleon Morales has acknowledged that individually-owned export enterprises and those declared by the Export Development Council (EDC) as priority export products for development may now sign their own export documents.

The concession was granted as most Philippine exporters continued to reel under the weight of a global trading environment that has gone sour due to recession in most of its trading partners including the United States, the European Union and Japan.

In a letter responding to the plea of Philippine Exporters Confederation, Inc. (PHILEXPORT) President and EDC vice chairman Sergio R. Ortiz-Luis Jr., Morales said he has disseminated a clarificatory customs memorandum circular dated March 20, 2009 reminding his men in ports of exit of the fact that under the Customs Brokers Act or RA 9280, exporters are allowed to sign their own documents as a measure to promote trade facilitation and lower the cost of doing business.

The said law, which mainly aims to professionalize the customs brokerage business by requiring professional licensure examinations, was signed in August 2004.

Since the law was enacted, exporters have raised a howl because brokers, without extending any other services to them, were given the monopoly to sign their papers for a fee. This is likened to the monopoly of notary publics in signing legal documents.

The exporters have gone to the extent of asking both houses of Congress to overturn that part of the Customs Brokers Act.

The said law is undergoing review by both houses for a possible amendment that will hopefully be passed before the end of the current Congress. -- Abe P. Belena, PHILEXPORT News and Features <--back

3. More investments for local sectors key to winning markets

The Philippines needs to invest more for the development of domestic sectors, especially agriculture. This will help boost their productivity and competitiveness, keys to taking full advantage of the free trade agreements (FTAs) while minimizing costs, a trade expert said.

“We have opened many markets through the FTAs, and yet, we have yet to maximize these opportunities because we are not competitive,” said Riza Bernabe in an interview at the sidelines of the workshop on technical barriers to trade.

Bernabe particularly cited the need for the country to put in money for the development of the agriculture sector, such as irrigation, farm-to-market roads and even seed and input support and assistance in value-adding and processing.

“You have to really invest in the agricultural sector. Developed countries provide huge domestic support and subsidies to their local producers,” she said.

Export subsidies, as well as food aid and export credit, insurance programs and guarantees, are considered trade distorting thus, do not provide a level playing field for foreign exporters, she noted. Such privilege are available to industries in developed countries such as the those in the United States and the European Union.

Moreover, Bernabe said attaining higher productivity will ensure sustainable protection for the domestic sectors against any adverse impacts of globalization. “Right now, we are just using tariffs. But the truth is, the most sustainable form of protection is if you can provide enough public investments to promote the productivity of the sectors,” she noted.

Bernabe said tariffs serve as artificial defense against any negative impacts of trade liberalization, but it is just a matter of time before the tariff regime ends, as liberalization of trade is pushed through FTAs or the multilateral negotiations which is currently stalled.

She reasoned that even with tariffs, smuggling can still take place in the country if local industries remain uncompetitive.

The Philippines has entered or in the process of finalizing the details of various trade agreements, including the ASEAN Free Trade Area-Common Effective Preferential Treatment Scheme, the ASEAN-China FTA, the ASEAN-Australia and New Zealand FTA, the ASEAN-India FTA, the ASEAN-Korea FTA and ASEAN-European Union FTA.

As part of ASEAN members’ commitment to create an FTA by 2010, tariffs on sensitive agricultural products will be reduced to zero to five percent next year. -- Danielle Venz, PHILEXPORT News and Features <--back

4. Jewelry makers eye more revenues from exports

Fine jewelry makers are stepping up efforts to achieve the industry’s export target of $66 million by 2012 and $76 million by 2014.

In a statement, the Confederation of Philippine Jewellers, Inc. (CPJI) said they are working for a more conducive business environment through the amendment of Republic Act No. 8502, otherwise known as the Jewelry Industry Development Act of 1998, and other laws.

Industry players are also developing world-class standards, designs and skills; establishing strong markets; strengthening enterprise management; and putting up efficient and sustainable production technology, it said.

These efforts are in line with the industry’s goal of converting the country’s jewelry small producers into major players in the local and export markets. CPJI members said they will tap the P1-billion Export Support Fund (ESF) to finance these activities. The ESF, which was provided by the government to help the export sector ride out the global crisis, is aimed to finance export development and promotions activities of local exporters.

Likewise, jewelry producers will coordinate with the Department of Trade and Industry’s Bureau of Export Trade Promotion and Center for International Trade Expositions and Missions on the implementation of their marketing and promotional strategies.

They will also work together with the Technical Education and Skills Development Authority and the Department of Science and Technology on their skills training programs.

The group further intends to provide jewelry product development training to improve the skills of its members.

The CPJI is an umbrella organization of eight jewelry associations with around 500 members.

It has recently elected its new set of officers for year 2009-2011 namely, Peter Zuñiga of Meycauayan Jewelry Industry Association Inc. who was re-elected as President; Malou Unson of Philippine Jewelry Business Club Foundation Inc, Vice President; Judy So of Guild of Philippine Jewelers Inc., Secretary; and Abelardo Mondonedo of Philippine Association of Pearl Producers and Exporters Inc. (PAPPE) as Treasurer. -- Danielle Venz, PHILEXPORT News and Features <--back

5. Protect Intellectual Property Rights, businesses told

Small and medium-sized enterprises (SMEs) must protect their intellectual property (IP) which is crucial especially in penetrating new markets and generating higher sales abroad.

Anil Sinha, counsellor for SMEs of Geneva-based World Intellectual Property Organization, in a workshop stressed that IP protection may enable a firm to open new markets through licensing, franchising, joint ventures or other contractual agreements with other companies.

He said product pricing will also partly depend on which the trademark is recognized and patronized by consumers, and the extent to which goods will face competition from rival products.

“In raising funds, patents, but also trademarks, may be important for convincing investors, venture capitalists?,” he noted.

Moreover, Sinha noted that enforcement of advertising and marketing campaigns for originally-designed product, brand and packaging likewise hinges on trademark protection.

He pointed out that some SMEs fail to internationalize successfully due to product imitations and challenges in enforcing IP rights in other countries, among others.

Meanwhile, Carmen Peralta, director of IP Philippines’ Information, Documentation, Information and Technology Transfer Bureau, recognized that the level of IP awareness in the country is very low.

Citing a study, Peralta said the Philippines lost grounds in terms of patents granted worldwide.

But she assured that the agency is squarely addressing this problem with the end goal of enabling the country embrace an IP culture and increasing the level of IP awareness here.

Peralta said they will work to educate the SMEs, research and development institutes and the academe on the relevance and value of patents and trademarks on enhancing competitiveness. -- Danielle Venz, PHILEXPORT News and Features <--back