The first of its kind grant from the national government was ordered released by the President as early as last January, but the processing of just the initial release was observed to be very slow due to a myriad of government documentation and auditing requirements.

Asked during the recent Philippine Business Conference if the balance is still intact, the President promised that the remaining funds are being processed and will be released to EDC Chairman Favila soon. -- Abe P. Belena, PHILEXPORT News and Features <--back

2. US to slap carbon taxes on industrial exports from developing countries

Filipino exporters have been forewarned that a new law being finalized in the United States congress may result in the imposition of carbon taxes on industrial products from developing countries.

The American Clean Energy Act of 2009 is projected to adversely impact on the local chemicals, cement and copper exports to the US, according to a letter from Ma. Corazon Halili-Dichosa, policy and planning director of the Department of Trade and Industry to PHILEXPORT President Sergio R. Ortiz-Luis, Jr..

She said that the new law mainly intends to give liberal incentives to industries that use renewable industries and new investments in clean fuels,.while slapping new taxes to users of fossil fuel led by oil and coal. This is apparently a response of the US government to help avert climate change.

The bill has been approved by the US House of Representatives but will still have to pass the Senate.

In going over the proposed law, PHILEXPORT News and Features however saw that the least developed and developing nations that have minimal contribution to carbon emissions to the atmosphere are exempted from the planned import tax.

Being a developing country that emits less than one percent of global daily green house gas emissions, the Philippines is supposed to be exempted.

If passed into law, the new tax on exports will be among the string of new laws the US congress is expected to pass this year that will require new hurdles for Philippine exports beginning next year.

Aside from this bill, also in the pipeline is one that that requires pre-shipment testing of the quality and safety of food exports to the US from the point of origin. Food processors and exporters especially the small and medium enterprises have expressed fears that they may not be able to comply due to inadequate laboratory facilities and the increased cost. Among other provisions, the bill also requires an annual registration of $500 per facility.

An earlier law requires traceability of all wood-based exports also beginning next year. Intended to impose controls on the use of harmful chemicals on wood products. A system for compliance is also urgently needed.

Another US law will take effect in 2012 to x-ray imports against materials that may be used in acts of terrorism. In addition, a similar but separate law is likewise being implemented particularly on food to also address issues on security -- Abe P. Belena, PHILEXPORT News and Features <--back

3. Jewelry sector seen to grow by 12%-15% in 2010

Jewelry makers are hopeful of hitting a robust 12 to 15 percent export growth in 2010 to around $51.75 million from this year’s $45-million target, on the back of the recovery of the global economy.

Peter Zuniga, president of Confederation of Philippine Jewelers, Inc., expressed this optimism despite various problems that continue to stifle the potentials of the industry.

“Our outlook for next year is positive. The economy overseas is getting better. When the economies of major markets recover, their purchases for fine jewelry are seen to go up,” he said in an interview at the sidelines of a jewelry info session.

Zuniga said various initiatives are now undertaken to prepare the industry for the projected increase in global demand particularly for Philippine jewelries.

“The improvement in technology and product design is now our major thrust. It is more on design competition because we believe, we have to develop pool of talented designers -that’s among our key advantages,” he noted.

Zuniga cited skills upgrading as the biggest problem of the industry which they are also addressing.

For her part, Cecilia Ramos, chairperson of the Meycauayan Jewelry Industry Association, Inc. (MJIA), during the session raised the need for industry players to implement the Philippine National Standard (PNS) on fine jewelry to enhance product competitiveness, sales and export performance.

Ramos said a Bureau of Product Standards-formed technical committee developed 20 PNS on fine jewelry related to the manufacturing, processing production of jewelry, including raw materials used and specifications of the final product. She said such PNS on jewelry is internationally accepted and compliant with International Organization for Standardization (ISO).

Moreover, Zuniga said industry players are gearing up for their participation in four global trade fairs slated next year meant to establish strong markets overseas. These are the 21st International Jewellery Tokyo, the Hong Kong International Jewellery Show, the Hong Kong International Jewelry and Gem Fair, and the JCK Las Vegas show.

“These major shows will enable us to present uniquely Filipino-designed and produced jewelry. We have to expose our products outside the Philippines,” he said. To maximize the industry’s potential, Zuniga said, they are urging the government to put up an export support fund intended for the promotion of Philippine fine jewelries, similar to what Thailand has for its fine jewelry industry.

He said government adoption of liberalized policy for raw material and equipment and machinery acquisition as well as support for trade fair participation are also crucial to boosting the growth of the industry.

“If the government can help our industry (through these efforts), we guarantee that the jewelry industry will pick up. We have natural resources -gold, silver, pearls and other mineral resources plus we have ample supply of manpower. This is the most crucial part,” he added.

PHILEXPORT trustee for fashion accessories Luis Sicat in the same session said while most exporting sectors, except for tuna, are reeling from decline in global sales, the fine jewelry surprisingly posted a positive growth of 9.41 percent in January to July this year.

In 2008, Philippine fine jewelry exports reached $39.90 million, National Statistics Office (NSO) data showed.

Top markets for these products last year were Italy (32 percent), Hong Kong (19 percent), Japan (16 percent), United States (14 percent), United Kingdom (12 percent), and others (7 percent). -- Danielle Venz, PHILEXPORT News and Features <--back

4. Exporters expect holiday season to boost domestic sales

More exporting firms are banking on the holiday season to improve their domestic sales which could make up for low export orders.

Marlane Villa-Real, president of the Buy Pinoy Movement Foundation, said around 140 exporters will participate in the 18th Buy Pinoy Exporters’ Fair slated this November 27 to 30 at SM Megamall in Mandaluyong City.

Villa-Real said it will be a trade event for holiday décor and gifts, food and organic products, garments and fashion accessories, housewares and furniture and furnishings.

“We will make available to the local buyers beautiful, unique and good quality Philippine products which they can’t buy elsewhere,” she said.

To further enhance consumers’ gift giving experiences during the holidays, Villa-Real said a booth for gift wrapping will be set up during the fair.

This will serve especially the corporate buyers which usually purchase giveaways and Christmas gifts for their employees, she said.

Villa-Real said sales of corporate gift packages are expected to increase overall revenues of participants.

But though total sales of exporters joining in this month’s fair could be lower than they generated from August Buy Pinoy fair, this could help pay their overhead cost, including salaries of employees, she said.

“Historically, based on our records, we get better sales in August because institutional buyers make purchases (during the month) which they can sell for the Christmas season. While the November fair is more for personal buyers who buy for their own use,” Villa-Real explained.

She said the Buy Pinoy fair project is way to encourage Filipinos to patronize and buy local products.

“This will help Philippine companies save jobs so we don’t retrench people,” said Villa-Real, also the chairman and chief executive officer of Buena Mano Crafts, Inc., a manufacturer and exporter of handcrafted Christmas and other holiday decors.

Citing the book, 12 Little Things every Filipino can do to Help our Country, authored by Alexander L. Lacson, Villa-Real explained that when one buys products made of a company that is Filipino-owned, all the money that he pays for the product stays in the Philippines.

“But if you buy an imported product, around 40 percent of the money that you pay for the product goes out of the country,” she said.

Since it may not be good economics to ask people to buy 100 percent local products, the book instead urged Filipinos to develop the attitude of setting at least half of their budget to purchase locally-made goods and the other half for their imported choices.

“If we all take seriously this 50-50 buying attitude, it could be another big push for our economy and for our people,” it said.

“It will retain capital in our country. It will build our local industries. It will build Filipino brands. It will create more employment for our people. It will send more Filipino children to school. It will give a brighter future to our nation,” it added. -- Danielle Venz, PHILEXPORT News and Features <--back

5. Internet-based businesses gain more clients

Businesses are encouraged to utilize websites which are deemed powerful marketing tools to gain more customers and generate higher revenues.

Millete M. Fabella, marketing manager of Team Sparrow Inc., during a jewelry info session said those that have a website are already at a huge advantage over their competitors.

“Many customers research services and products online before purchasing. By having a website, you can inform potential customers of your services or products and what separates your business from your competitors,” she said.

Fabella said the internet introduces a business to new consumers and retain them as a client.

It is also the best way to inform clients of specials or sales that a business is offering, she added, noting “this will help increase business revenue”.

Fabella pointed out that compared to television and magazine advertising, a website is a low-cost, effective way to market businesses.

She explained that search engines allow them to target a marketing group more effectively than any other advertising strategy.

“Having high ranking search engine results, your business’ web traffic will dramatically increase and provide you with more customers than any other source of marketing,” she said.

As more companies do not have funding to provide a 24-hour phone support service, Fabella said, getting a website is an option.

“With an internet site, your product or service is accessible globally, to prospective customers 24 hours, 365 days a year. More and more people these days are using the internet as a first post of call because of its convenience and to save time,” she said.

Fabella also advised businesses to develop an organized websites and make these appealing to consumers. -- Danielle Venz, PHILEXPORT News and Features <--back

6. EPAP seeks tariff hike on ethanol to attract local investments

In a bid to entice more local investments into the ethanol industry, tariffs on ethanol are recommended to be raised from 1% to 20%.

The suggestion came from the Ethanol Producers Association of the Philippines (EPAP) during a recent tariff hearing. According to EPAP, the approval will facilitate compliance with Republic Act 9367 or the Biofuels Act of 2006 which mandates local self-sufficiency of ethanol for the National Biofuel Program.

The Act was enacted to help wean the country off its dependence on imported fuels and promote clean environment, public health, and job creation in the largely agriculture-dependent rural areas.

In defending the higher tariff on ethanol, Tetchie Cruz-Capellan, EPAP Executive Director, stressed that building an ethanol plant costs around P3 billion. To meet the humongous capital requirement, Capellan said that investors must be offered adequate tariff protection as in India, Indonesia, Thailand and Brazil. Brazil, the world’s largest ethanol exporter, levies a 20% duty on ethanol imports.

'Without strong government support, investors will remain reluctant to commit billions of pesos into the Philippine ethanol industry,” said Capellan.

EPAP further noted that Thailand’s ethanol production is projected to grow from 408 million liters in 2008 to one billion liters in 2011 due to strong government support.

In contrast, Philippine imports of ethanol skyrocketed to $18 million compared to US$4.8 million in 2006. The bulk of these imports were supplied by Brazil, Thailand, Pakistan, the Netherlands and China. All of these countries provide a wide range of incentives, particularly massive funding for research and development to aid the growth of their biofuel industries.

Meanwhile that the country is still heavily import-dependent and local ethanol supply is insufficient to meet the additive requirement to gasoline in compliance with RA 9367, Executive Order (EO) No. 449 was signed, reducing the 10% tariff to the current 1%. Under the said EO, oil companies may avail themselves of the reduced tariff, provided these will be used for the National Biofuels Program as certified by the Department of Energy (DOE).

Capellan however argued that the said EO should be repealed, as there are already local ethanol producers operating in the country, with production estimated to reach 80 million liters by 2011 compared to 50 million liters in 2009.

At present, there are two bioethanol plants in the country, supplying 25 percent of the annual domestic demand for bioethanol. By 2010 two more ethanol plants Green Futures Innovation and Alto Power are expected to be built.

The Tariff Commission raised doubts on the exigency of the proposed tariff hike, pointing out that there are several safety nets provided for the local industry in the Biofuels Act.

“Said law already affords considerable protection to the ethanol industry as it requires oil companies to import bioethanol only to the extent of the local supply shortage,” said Tariff Commission Chairman Edgardo Abon.

To boost investment in the production, distribution and use of locally-produced biofuels at and above the minimum blends, the law also provides financial assistance and exemption from the imposition of specific tax and value added tax.

The petition of EPAP to raise the duty on ethanol also raised concerns from end-users, particularly industry representatives who suggested that the increase should not be higher than the three percent duty on oil; must be time-bound, and implemented gradually within this particular time frame.

On the other hand, it was supported by the Confederation of Sugar Producers’ Associations, Inc. (CONFED). Further development of the ethanol industry will create an additional demand for sugar, yielding higher prices and profits for the sugar industry. This will serve well the 60,000 sugar farmers and 600,000 sugar workers in the country, according to EPAP -- Ritchie Alburo, PHILEXPORT News and Features <--back