This was recently renamed as Export Support Fund (ESF) with its scope expanded from purely marketing efforts to long-term development projects calculated to bolster the competitiveness of export industries, timed when the entire industry found itself the hardest hit segment of the economy by the global recession and trade slump. -- Abe P. Belena, PHILEXPORT News and Features -- Abe P. Belena, PHILEXPORT News and Features <--back

2. MARINA cuts export wharfage fees by half; other fees by shipping lines to be regulated

Still reeling from double-digit decline in global sales, exporters got a helping hand this week when the Philippine Ports Authority (PPA) announced it is cutting by half the export wharfage fees it collects on each container of export shipment until the end of December this year.

The decision was relayed by PPA general manager Oscar M. Sevilla in a letter responding to an appeal earlier made by Philippine Exporters Confederation, Inc. (PHILEXPORT) President Sergio R. Ortiz-Luis seeking for a cut in government charges on export shipments.

Savilla said that in its latest meeting, the PPA board of directors “reconsidered the request of PHILEXPORT and has approved the reduction by 50 percent of the Export Wharfage Fee until December 31, 2009.

The decision will take effect, he added, 30 days upon the publication of the implementing rules of the decision in a national daily newspaper. According to a PPA source, the notice was published on August 14 and will therefore be effective on September 13.

When the new rates will be in force, exporters are expected to cut wharfage fee for a 20-foot container from P259.70 per container to P130.35 and that for 40-foot containers at P952.22 to half of that amount.

The issue on high port charges was repeatedly being raised by PHILEXPORT as one of the factors that have contributed to the erosion of the competitive advantages of Philippine products in comparison to similar products from competitor nations.

A study made by an independent group had found that wharfage fees charged by the government has already been small as part of the average of P1,500 per container that exporters have to shell out for every container that they ship to destinations abroad.

The bulk of the local charges were traced to private shipping lines that slapped so many fees to shippers that ranged from advanced deposits on the use of containers, to port handling fees, to cleaning fees after the containers are returned.

The unregulated imposition of allegedly “unnecessary” charges by shipping lines plying international routes in our seas was brought to the attention of PHILEXPORT and the Export Development Council (EDC) by groups of exporters whose experiences jived with the result of the independent research study.

In response, the Maritime Industry Authority (MARINA) has drafted an executive order for approval by President Arroyo to put the international shipping lines under its regulation as recommended by the EDC.

The draft order was forwarded by EDC executive director and concurrent head of the Bureau of Export Trade Promotion Senen Perlada to DTI Secretary Peter Favila for presidential decision.

Taking a stand on the regulation of domestic charges made by international shipping lines, the PPA said it would be better for MARINA to simply “supervise” not directly regulate, the fees they impose on export shipments. -- Abe P. Belena, PHILEXPORT News and Features <--back

3. Sustain macroeconomic stability to benefit trade liberalization, RP told

The Philippines must sustain macroeconomic stability through keeping inflation low and ensuring sustainable finances in order for its local firms and their workers benefit from trade liberalization.

This recommendation was made by Dr. Ponciano S. Intal, Jr. and Miguel Roberto V. Borromeo of the De La Salle University-Angelo King Institute in a paper titled “Globalization, Adjustment and the Challenge of Further Sustained, Robust and Inclusive Growth and Industrial Upgrading: Insights, Lessons and Policy Recommendations.”

This summed up six papers of local economists and integrative reports for Indonesia and Vietnam which were presented in a Manila forum. These papers tackled how ASEAN members can ensure broad-based and inclusive growth as greater economic integration and economic competition increase the pressures for industrial upgrading.

Intal and Borromeo stressed that macroeconomic stability is critical to high and inclusive economic growth.

“Series of macroeconomic crises or near crises tends to breed business uncertainty and reduced investment rate, contributing to halting or no growth in productivity, and low overall rise in welfare,” they noted.

The economists thus urged economic planners to implement prudent macroeconomic management to prevent macroeconomic instability and minimize boom bust cycle.

“Public debt and external debt should not get out of hand,” they noted. “(Also,) Address the poor structural foundations of the country's fiscal regime such as tax.”

The paper also underscored the need for the country to significantly improve its investment climate to substantially increase its investment rate.

“(These require) infrastructure investments and a wide range of initiatives, including anti-corruption,” it said. “These should be the number one agenda of politicians this coming elections.”

It noted that investments are critical to smoother economic adjustment under globalization for improved infrastructure, technological upgrade and labor productivity growth.

To achieve robust growth, the Philippines, as well as Vietnam and Indonesia, were asked to invest more in human capital to facilitate industrial upgrading and inclusive growth.

Such investments will shore up the workers' skills and work place training, improve their educational attainment and quality of the populace and provide wider access to good quality education, it explained.

Other recommendations made by the economists in order for the Philippines to shield itself from the impact of trade liberalization were: stronger policy focus on addressing underemployed and poor fully employed workers, vigorous expansion of social partnerships and firms' implementation of good practices initiatives. -- Danielle Venz, PHILEXPORT News and Features <--back

4. LGUs asked to determine potentials of their various tourism sub-sectors

Local executives are asked to determine the potentials and requirements of various tourism sub-sectors suitable for their localities to make the Philippine tourism sector competitive and make it at par with neighboring countries.

Uwe Sturmann, project manager of German Technical Cooperation’s (GTZ) Private Sector Promotion (PSP), in a recent business conference said the local government units (LGUs) can use the PSP program in this effort. This was developed as set of guidelines to support tourism development at the local levels.

Sturmann said the program identified the six tourism sub-sectors as eco-tourism; medical, health, wellness and retirement tourism; MICE (Meetings, Incentives, Conventions, Exhibitions) Tourism; Adventure and Sports Tourism; Amusement, Entertainment, Leisure and Beach Tourism; and Culture and Heritage Tourism.

“Focusing on niche markets for quality tourism may yield potential for growth even during the global economic crisis,” he stressed. “The Philippines can weather the crisis provided that its tourism sector is resilient.”

He said LGUs must also identify the support facilities and infrastructure needed to develop the sub-sector and other complementary measures to ensure the long-term sustainability of tourism activities.

Local and regional business and investment climate has to be improved towards the needs of the tourism industry, he said.

Likewise, Sturmann pushed for the development of global tourism value chain.

“To develop tourist attractions and activities at the local/regional level, also look at value chain stages outside the region to increase the number of tourists and sales volume,” he said.

Sturmann reasoned that tourism promotion reaches beyond the boundaries of LGUs into national and global value chains due to the originating markets located outside the region.

He said the service sector tourism is very complex and has many linkages with various supply chains providing inputs into the main tourism value chain.

Moreover, Sturmann underscored the need to upgrade tourism through various interventions also in related sectors.

“Bring local producers especially MSMEs (micro, small and medium enterprises) into the tourism value chain,” he advised.

Among the sectors identified that can participate in the tourism value chain are those producing furniture, soft furnishings, arts and crafts, table mats, staff uniforms, bed linen, handmade soap, entertainment, food, vegetables/fruits, fresh fish, beverages, building materials and local transport.

Sturmann said tourism is particularly suited for stimulation of the economy because it has extensive multi-sectoral supply chains, it is labor-intensive and has strong foreign exchange earning potential. -- Danielle Venz, PHILEXPORT News and Features <--back

5. BPO stakeholders gear efforts to establish foothold in Europe, Japan

Key stakeholders in the country's business process outsourcing (BPO) sector are undertaking efforts to establish a foothold particularly in nontraditional clients Japan and European countries which are considering offshoring services.

Commission on Information and Communications Technology (CICT) Commissioner Angelo Timoteo Diaz de Rivera said the country could effectively serve these markets given the infinite talent resources.

“We have a challenge of establishing a foothold in Europe and in Japan; particularly in Japan, we need to be able to speak Japanese language in order to penetrate that market,” he said in a business conference.

De Rivera said the country now has a high concentration of customers in North America because of Filipino's efficiency in the English language and their natural affinity with the US in the way of doing business.

He said the English language advantage is the reason that the Philippines has become a preferred destination for voice services.

Voice services, which include most contact centers, comprised around two-third of the BPO industry's total revenues of $4.1 billion last year. Revenues of back office/knowledge process outsourcing non-voice services sector accounted for the remaining one-third reaching $827 million.

Oscar Sañez, Philippine Exporters Confederation, Inc. (PHILEXPORT) trustee for the information technology (IT) services sector, earlier said industry players are continuing to create awareness on the outsourcing services being offered by the Philippines.

“There are places in Europe where they don't even know that the Philippines is in this industry. Also in UK (United Kingdom), there are still many sectors there that asked: you speak English in the Philippines? Some of those questions were largely driven by just lack of awareness,” he said. -- Danielle Venz, PHILEXPORT News and Features <--back