A grant agreement was signed between the Export Development Council (EDC) which was to administer the fund and the national government. Terms of reference and conditions for fund use were drawn. Industry associations, clusters and PHILEXPORT chapters were asked to submit project proposals that meet the pre-conditions for a grant.

Towards the end of December this year, projects for funding from organized exporters from Mindanao to the Ilocos region have been submitted for funding, exceeding in value the P1 billion promised by the President.

The rate of delivery was, however, too slow.

A check with the EDC secretariat by PHILEXPORT News and Features reveal a few uneasy facts. The first P200 million from the P1 billion promised grant was finally transferred from the Department of Budget Management (DBM) to the Department of Trade and Industry (DTI) about mid-year for use in approved projects.

By then, the project evaluation teams representing officials of the International Trade Group of DTI and leaders of industry associations had received the bulk of project proposals for evaluation and approval. By the end of October, the EDC had approved 17 different projects worth P268, 250,000 or over P60 million over the first tranche of released funds.

For his part, Trade Secretary Peter Favila, as trade chief and chairman of the EDC, has cleared the release of P155,925.430.00 worth of projects.

Additional proposals have been received for evaluation and approval by the EDC and the full amount of P1 billion has been covered if all those proposals get the green light.

As of press time, however, the only amount actually released for individual projects was P10,874,930.41. Actual use of funds from the P1 billion grant more than a year after it was promised was a very tiny percentage.

Responding to the grumbling exporters, President Arroyo, while addressing the Philippine Business Conference last October, had assured the export leaders the promised funding support was still intact and will surely be used for the projects they were intended for. There and then, ordered Budget Secretary Andaya to process the next tranche for release.

Inquiries by the PNF had revealed a few reasons, mostly on the processing of papers, to have been behind the trickles that have released so far. The biggest of these was the change in the rules governing the disbursal of the grant.

Under the original agreement, the system of disbursal was supposed to be by liquidation. This would mean that upon approval of a project, the proponent gets a partial amount from the fund. Subsequent releases are then made as a project progresses.

Midway through the processing of project proposals, there was a change in the rule by imposing a reimbursement system of payment to approved projects. This would mean that industry groups with approved projects will have to first advance their own money before they can collect reimbursements. Some rich organizations like that of the electronics industry and a few other groups, welcomed it.

The rest, made up of mostly struggling small and medium industries whose sales have drastically been cut down, did not have the money to advance to the projects submitted for government funding. This, plus other stringent documentation requirements of government projects to avoid misuse of funds, had resulted in government assistance coming to a beleaguered sector at a rate of too little, too late. -- Abe P. Belena, PHILEXPORT News and Features <--back

2. BoC e-link with 40 government agencies done by early 2010

Exporters importing raw materials could further benefit from reduced cost and time of doing business as the Bureau of Customs (BoC) gears up to interconnect electronically its systems with government agencies dealing with international trade.

BoC deputy commissioner Alexander M. Arevalo informed the PHILEXPORT board of trustees the other day that Customs expects to finish linking its systems initially with 10 national government agencies providing clearances by year-end.

“Then, we will go down to the regional and provincial (agencies). So by the first quarter next year, all 40 agencies at the national level that issue permits and clearances will be interconnected,” he said.

Arevalo said the BOC’s electronic-to-mobile (E2M) customs system has three components: export, import and support systems for both imports and exports.

He assured importers of faster release time of imports through the bureau’s import assessment system, one of the components of E2M.

“Your shipment can be released within 30 minutes because your manifest is submitted 12 hours before arrival. Within this time, the bank is given only 20 minutes to confirm your payment. Other than these, the speed of processing and release will also be a factor of complete documents,” the customs official explained.

Arevalo said the system does not accept cash or checks but only payments from electronic transfer of accounts.

Meanwhile, he added that the Bureau is almost ready to roll out the electronic system for exports.

The E2M’s Client Profile Registration System (CPRS) for exports is helping facilitate the accreditation and registration of all exporters, the same way it is done for importers in the counterpart CPRS for imports.

“Its technical solution is ready for deployment. We are just waiting for the finalization of the customs memorandum order that would actually implement this system,” Arevalo added.

The E2M is part of the full computerization efforts of Customs geared towards the realization of the National Single Window (NSW) which aims to integrate electronically trade-related government operating systems nationwide and eventually with ASEAN.

“The NSW will project a very positive competitive position of the whole Philippine economy because we are in effect able to work as one in terms of imports and exports,” he said.

“Our two-pronged goals are reducing the cost and the time of doing business which are actually the heart of trade facilitation,” he added. -- Danielle Venz, PHILEXPORT News and Features <--back

3. RP to continue implementing Halal export trade development programs

The Philippines will continue implementing various export trade development programs next year which will enable it to take advantage of the opportunities offered by the $1-billion Halal food market.

Senen Perlada, director of the Department of Trade and Industry’s Bureau of Export Trade Promotion (BEPT), said that the programs include advocacy, implementation of the Philippine National Standard (PNS) and the Joint Administrative Order (JAO) and the strengthening of the capabilities of the Halal National Accreditation Board.

PNS provides the general guidelines for the Philippine food industry on the preparation and handling of Halal food, including food supplements.

Perlada said the Bureau this year already conducted public hearings on JAO in Manila, Cebu and Davao, and Halal export seminars in Region 6 particularly Capiz, Aklan and Antique.

“We have to attend to those things so that we will be able to penetrate all the potential markets for our Halal products,” he said.

Perlada said there are Halal markets in the United States, in the Middle East, China, Malaysia and in neighboring ASEAN countries.

In its 2010 plans and programs, the BETP has already proposed the conduct of an outbound business matching mission for Halal food in Malaysia this May.

BETP assistant director Michael Dodjie Fabian, for his part, said they will also tap new markets for Halal food and at the same time undertake benchmarking programs.

Fabian expressed optimism the Halal food industry will continue posting double-digit growth in 2010.

“Food has always been a strong sector for us,” he said.

The promotion of Halal products overseas was among the country’s strategies identified to generate revenues under the Philippine Export Development Plan for 2008 to 2010.

Aside from the Middle East and other Muslim countries, other important markets for Halal products include India, China and South Africa. -- Danielle Venz, PHILEXPORT News and Features <--back

4. FOBAP urges exporters to offer new products and services

Exporters are advised to offer new services and products utilizing unique raw materials to regain buyers and tap new ones.

“We need a lot of product development and lot of presentations to get buyers to book with us. Our concern is still how to get back the business that we lost,” said Marian Santos-Nash, trustee of Foreign Buyers Association of the Philippines (FOBAP) Integrated Development Foundation, Inc., in an interview.

Nash said buyers have started coming back as the market slightly picked up.

“There are now buyers and there are a lot of new things that they need,” she said. “We have to watch out what are the needs of both the local and international markets.” Nash underscored the importance of “storyboard selling” which incorporates product development, interior design as well as raw materials and sourcing compliance.

“When you sell something, you can’t do item selling. It should be part of the story,” she said. “If you do the spa, you have to also do the candle and teaching the technology should be part of the package. If bathroom is your motif, you should offer all products which can be found in the bathroom.”

Nash urged businesses to utilize unique raw materials to make their products competitive.

She said they must also sell products which will complement what Vietnam and other countries supply to traditional markets.

“You have to recreate with new technology and designs. Products can’t be handmade like before because it takes a long time to make these; these must be semi-massed produced. And finishing is important,” she added.

To gain more buyers, Nash raised the need for exporters to aggressively market their products.

“When the business is bad, it is when you should be active socially. You have to present yourself to more buyers and spend more time in advertising your company,” she said. -- Danielle Venz, PHILEXPORT News and Features <--back

5. Chinese firm to make RP its global logistics hub

Tiens Group Co. Ltd, China's multinational conglomerate in biotechnology, education, retail, tourism, finance, international trade and e-business, is keen on making the Philippines its global logistics hub to complement its varied business interests in the country.

Said Chinese firm is investing an initial USD20 million into the country's logistics business. This will complement the company's interest in retail, tourism, finance, international trade, and e-business.

Board of Investment (BOI) Managing Head Elmer C. Hernandez recently signed the memorandum of agreement (MOA) on the said project.

Hernandez indicated that the company's initial investment in logistics will be followed by more investments in other areas. “The Group's long-term plan is to go into biotech traditional drug manufacturing in this country,” Hernandez said.

Established only in 1995, Tiens Group Co. Ltd. is already doing business in more than 190 countries. It has set up 50,000 franchised stores around the world and has branches in 110 countries.

The company is trying to gain a foothold in the Asia-Pacific region through Indonesia where the Asia-Pacific Region of Tiens Group is based. Since 2000, the company's business presence has expanded to the entire Asia-Pacific region, including Malaysia, Singapore, Brunei, Thailand, Vietnam, India, Japan and the Philippines. The company has about two million active distributors in the region alone.

Although the company is engaged in highly diverse businesses, its primary interest is in health food, health care products, skin care products and home care products. It is competing with direct selling cosmetic brands like Sweden-based Oriflame, US-based Amway and Avon. Since its establishment, Tiens has developed and produced 37 nutrition supplements, which include wellness products and dietary supplements. -- Ritchie Alburo, PHILEXPORT News and Features <--back