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26 January 2015 1
26 January 2015
Vol. 20, No. 02
A bi-monthly digest of global and domestic industry trends and developments. Published by
the Knowledge Management and Information Service (KMIS) of the Department of Trade
and Industry (DTI)  Manila, Philippines  Tel. (632) 895.3611  Fax (632) 895.6487
 To subscribe, email: publications@dti.gov.ph  Online: http://www.dti.gov.ph
In this issue
Focus
FDIs to rise this year
Inside DTI
DTI livelihood seeding program launched
in Tacloban City
Good News, Philippines!
1. Manufacturing investments surge
in 2014
2. Exports projected to grow over 10%
3. Strong investor interest to continue
MSMEs
1. IRR for Go Negosyo Act released
2. Businesses, schools urged
to put up FabLabs
Business Update
1. Export dev’t fund endorsed
2. NCC to launch Doing Business
game plan 2015
3. New markets targeted
by PHL exporters
Consumer News
1. Consumer Act amendments pushed
2. DTI urges consumers to use
12 air passenger rights
ASIA Watch
PHL exports strongest
among Asian economies
Statwatch
Feature
AEC to take effect by end-2015
What’s New
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Focus
FDIs to rise this year
T
he expansion of foreign direct
investments (FDIs) in the
country is expected to be
sustained this year on the back
of positive economic conditions,
the Department of Trade
and Industry (DTI) announced.
Also, Domingo said the country’s
entry recently to the European
Union’s (EU) Generalized Scheme
of Preferences Plus (GSP+), which
allows the country to export 6,274
products to the bloc at zero duty,
is expected to result in higher exports.
“Definitely there would be a strong
upward trend,” DTI Secretary
Gregory L. Domingo said.
The country’s hosting of the Asia-Pacific
Economic Cooperation (APEC)
Summit this year is likewise seen
to attract more foreign investments
into the country.
Bangko Sentral ng Pilipinas (BSP)
data showed that FDI inflows
for the January to September 2014
period reached USD 4.88B, already
surpassing the BSP’s target
of USD 4.44B for 2014.
The total FDI inflows in 2013 stood
at USD 3.9B.
Inside DTI
DTI livelihood seeding
program launched
in Tacloban City
Vol. 20, No. 02 2
Moreover, the continued construction
activities of companies are expected
to spur investments in other parts
of the supply chain.
“I am bullish because of all the
positive news that is coming out,”
Domingo said.
“We are attracting big companies
to come here and set up facilities.
Once they enter the country, they also
bring with them other parts
of the supply chain,” Domingo said.
Particularly, he said the reduction
of oil prices in the world market
would be very beneficial for the
Philippines as oil forms a big part
of prices of consumer goods.
“It is a virtuous cycle. As that happens,
it further strengthens our position
as a manufacturing hub. Once we fill
the gaps in the supply chain, we
become more efficient,” he said.
S
ome 6,000 entrepreneurs
in Tacloban City who lost
their sources of livelihood due
to typhoon Yolanda have received
business starter kits from the
Department of Trade
and Industry (DTI).
DTI Secretary Gregory L.
Domingo said the program aimed
to help beneficiaries start or expand
their businesses such as sari-sari
store, agri-feeds, food vending,
and delicacy making.
“If this is successful, we will make this
a model and launch this nationwide.
We have to ensure that this is wellimplemented because international aid
agencies have tagged this program
as a post-disaster response,”
Domingo said.
Components of the
business starter kit
A. Sari-Sari store
1. bag of rice
2.calculator
3. grocery stocks
4. record book
5. weighing scale
B. Food business
1.chairs
2. cooking equipment
3. kitchen ware
4.stove
5.tables
6.tents
“We call this a seeding program
because we are planting this
assistance to help small entrepreneurs
expand the business,” he said.
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26 January 2015 3
The DTI will check the status
of beneficiaries after three months
and then after a year. Those who
are performing well will receive
more benefits.
The initiative represents the
partnership of the Philippine Disaster
Recovery Foundation, Gawad Kalinga,
Oxfam, and other humanitarian relief
Good News,
Philippines!
1. Manufacturing
investments surge
in 2014
I
nvestments approved by the
Board of Investments (BOI)
for the manufacturing sector
reached P24.5B in 2014, up 77.5%
from P13.8B in 2013.
All of manufacturing’s subsectors
registered triple-digit growth,
substantially contributing to the
increase of anticipated direct jobs
from BOI-approved projects.
Some 58,619 jobs are expected to be
generated from BOI-approved projects
over the next few years.
The BOI registered P317.69B
in domestic investments for 2014,
comprising 90% of total investments
while the remaining 10%, or P36.85B,
came from foreign sources.
The electricity, gas, steam, and air
conditioning supply sector continued
2. Exports projected
to grow over 10%
P
organizations under the early recovery
and livelihood cluster.
In Eastern Visayas, 13,312 of the
18,405 registered micro, small,
and medium enterprises (MSMEs)
were displaced by typhoon Yolanda.
Of that number, 5,322 suffered total
damage while 7,990 experienced
partial damage.
to record the biggest share of the total
investments with P174.7B.
By region, the National Capital
Region (NCR) is the top destination
of investments in 2014, registering
a 215-% increase to P116B from
P36.8B in 2013.
Investment pledges
for manufacturing in 2014
Sector
% growth
from 2013
Basic metals
6,651
Beverages 802
Electrical equipment
320
Rubber and plastic products
281
Motor vehicles
269
Textiles100
Paper and paper products
100
Other non-metallic 100
mineral products
Source: BOI
hilippine exports could grow
over 10% in 2015 due to
increase in the electronics
sector, continued strength in nonelectronics, and the additional exports
from the country’s qualification to the
European Union (EU) Generalized
Scheme of Preferences Plus (GSP+),
Department of Trade and
Industry (DTI) Secretary
Gregory L. Domingo said.
to President Benigno S.
Aquino III for approval.
Recently, the DTI and the Export
Development Council (EDC) have
submitted the Philippine Export
Development Plan (PEDP)
The PEDP also forecasts the
country’s export breaching the
USD 100-B mark in 2015 for the first
time in the country’s history.
The proposed PEDP sets the targets
and strategies to grow exports from
2014 to 2016.
For this year, the export target has
been raised to 9%-10.1% growth
range from last year’s 8%-9.3%.
The target for 2016 is at 10.1%-11%.
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Vol. 20, No. 02 4
The EU-GSP+, which took effect
last 25 December 2014, entitles
zero tariff on the Philippines’ 6,274
export products to the 28-member EU
3. Strong investor interest
to continue
T
he Department of Trade and
Industry (DTI) is upbeat that
the strong interest in the
Philippines would continue this year.
Investor confidence in the Philippines
is very high as shown by the number
of inbound business missions
conducted in the country in 2014,
DTI-Industry Promotion
Group (IPG) Undersecretary
Ponciano C. Manalo Jr. said.
Inbound business missions to the
country reached 212 as of December
MSME News
1.IRR for Go Negosyo
Act released
2.Businesses, schools
urged to put up
FabLabs
countries. This is expected to create
additional export revenues of €600M,
and generate 200,000 jobs.
2014, greater than 100% of the 210
total in 2013 record.
Manalo said investments being made
to the country are also growing as the
number of inbound business missions
picks up.
He also attributed the expected
investment growth to the sustained
remittances from overseas Filipinos
(OFs), robust business process
outsourcing (BPO) sector, and strong
consumer spending.
he Department of Trade
and Industry (DTI) has
released the implementing
rules and regulations (IRR) of
Republic Act (RA) No. 10644, also
known as the “Go Negosyo Act,”
which seeks to make it easier for
entrepreneurs to register and start
their businesses.
T
and services to micro, small, and
medium enterprises (MSMEs).
Under the Act that was signed into
law by President Benigno S.
Aquino III on 15 July 2014, the DTI
will establish and manage Negosyo
Centers which will offer assistance
Meanwhile, the centers will be linked
to the Philippine Business Registry
System (PBRS) to help entrepreneurs
register their businesses easier and
faster.
T
Assistant Secretary Ceferino
S. Rodolfo said.
he Department of Trade
and Industry (DTI) has advised
businesses and educational
institutions to set up Fabrication
Laboratories (FabLab) to help boost
the competitiveness of micro, small,
and medium enterprises (MSMEs).
“The FabLab helps develop the
local economy by providing better
and more competitive products.
It enhances the local MSME
ecosystem, encourages start-ups,
and develops entrepreneurs who
create more jobs,” DTI-Industry
Development Group (IDG)
The facilities such as SME Centers
and National Economic Research
and Business Assistance Centers
(NERBAC) administered by the DTI
may also be converted into
Negosyo Centers.
A FabLab is a facility that implements
a computer-based innovation, design,
and fabrication workshop that allows
local manufacturers to do the following,
among others:
•
•
•
•
Create prototypes and/or
scale models,
Illustrate graphic designs,
Produce goods in large
quantities, and
Transform design ideas
into physical forms.
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Business Update
1. Export dev’t fund
endorsed
26 January 2015 5
The first FabLab in the country
was established in the Bohol Island
State University (BISU) with funding
provided by the university, as well as
partner agencies such as the DTI,
the Department of Science
and Technology (DOST), and the
Japan International Cooperation
Agency (JICA).
n support of the Philippine Export
Development Plan (PEDP)
2014-2016, Malacañang
has already endorsed a P1.8-B export
development fund to the Department
of Budget and Management (DBM)
last December 2014.
the Office of the Executive Secretary
has already endorsed the fund
to be included in the government's
2016 budget.
I
Although the PEDP 2014-2016 is still
awaiting approval by President
Benigno S. Aquino III,
2.NCC to launch Doing
Business game plan
2015
T
(MAB 12/22)
he National Competitiveness
Council (NCC) will be launching
the 2015 Doing Business
game plan to sustain the Philippines’
improvements in competitiveness
rankings and to reach the goal
of being at the top third quartile
by 2016.
•
•
•
•
In the last three to four years,
the country achieved gains in seven
out of the 12 NCC-tracked reports that
rank the countries’ competitiveness.
These are:
“As seen in our Task Force on Doing
Business, public-private sector
collaboration can be an effective
driver of change and we hope to bring
about even more reform through this
formula, especially as changes in
the methodology of competitiveness
reports set off even tougher
challenges ahead," NCC Private
Sector Co-Chair Guillermo M.
Luz said. (TPS 01/04)
• The World Bank - International Finance Corp.’s Ease of Doing Business,
• Transparency International’s Corruption Perception Index,
• The World Economic Forum’s (WEF) Global Competitiveness Report,
3.New markets targeted
by PHL exporters
The amount will be included
in the Department of Trade
and Industry’s (DTI) budget and will
be allotted mainly for general exports
promotion and product development.
T
he Export Development Council
(EDC) is urging the local export
industry to tap new markets
to boost its growth.
At present, the country’s top export
markets include China, Japan,
and the United States (U.S.).
“Hopefully we can extend our markets
a bit to more of the Gulf Cooperation
Council (GCC) plus countries —
maybe Turkey, Brazil, and Association
Heritage Foundation’s Economic Freedom Index,
WEF’s Global Enabling
Trade Index,
WEF’s Travel and Tourism
Report, and
WEF’s Global Information
Technology Report.
Countries eyed for export
Bahrain*
Oman*
Cambodia

Saudi Arabia*

United Arab Emirates*
Viet Nam
Brazil
Kuwait*
Laos
Myanmar
Source: EDC
Qatar*
Turkey

* GCC
of Southeast Asian Nations (ASEAN)
countries, such as, Cambodia, Laos,
Myanmar, Viet Nam countries,” said
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Vol. 20, No. 02 6
Export Market Bureau (EMB)
Director Senen M. Perlada.
Under the Philippine Export
Development Plan PEDP, total exports
for 2015 is expected to be at 9%-10.1%
while that for 2016 is at 10.1-11%.
The recorded total export as of
November 2014 was USD 57.01B
Focused export products
for inclusive growth
Crustacean

Fresh and processed foods
Halal organic and natiral products
Mollusks
 Still electornics

Source: EDC
(TPS 01/03)
Consumer News
1.Consumer Act
amendments pushed
A
move to amend Republic Act
7394 or the Consumer Act
of the Philippines calling for
stiffer penalties and better regulation
of electronic commerce (e-commerce)
has already been proposed
in both Houses of the Congress.
“We need to update the outdated
administrative fines of the law and
for the Consumer Act to catch up
with e-commerce not only in goods
and services, but also in financial
instruments,” Department
of Trade and IndustryConsumer Protection
Group (DTI-CPG)
Undersecretary Victorio
Mario A. Dimagiba said.
The proposed amendments look
to increase the administrative
fines from the current range of
2.DTI urges consumers
to use 12 air passenger
rights
T
P500-P50,000 to P300,000-P1M
and to include all forms of
e-commerce among the subjects
under consumer laws.
Among the other proposals
of the Department is the subjecting
of all financial transactions, including
those of consumers, under the
regulation of the Bangko Sentral ng
Pilipinas (BSP).
The DTI also hopes to add the BSP
and the Department of Energy (DOE)
among the members of the National
Consumer Affairs Council (NCAC),
as well as more organizations
and representatives from the private
sector. The NCAC is a multisectoral
organization that is mandated
to ensure the effective execution of
consumer welfare programs in the
Philippines. (MAB 01/04)
he Department of Trade
and Industry (DTI) reminded air
passengers of their 12 rights
under the Joint Administrative Order
(JAO) No. 1, series of 2012
or the Air Passenger Bill of Rights
entered into by DTI and the
Department of Transportation
and Communications (DOTC).
Republic Acts (RA), each under
the jurisdiction of the two
Departments respectively.
Signed by DTI Secretary
Gregory L. Domingo and
DOTC Secretary Joseph
Emilio A. Abaya in 2012, the said
bill of rights was fashioned after two
Meanwhile, RA 7394 or the Consumer
Act of the Philippines is implemented
by DTI and governs businesses
to practice fair trade. (PIA 12/29)
The DOTC regulates the air transport
industry with RA 776 or the Civil
Aeronautics Act of the Philippines
through the Civil Aeronautics
Board (CAB).
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ASIA Watch
PHL exports strongest
among Asian economies
Exports Growth in select
Asian countries
November 2014
Country
Growth (in %)
Philippines19.7
Viet Nam
10.8
China4.7
Taiwan3.7
Hong Kong
2.8
Source: PSA
G
rowth of Philippine
merchandise exports hit
19.7% in November 2014,
placing the country on top
of other East and Southeast Asian
economies for the period, the National
Economic and Development Authority
(NEDA) reported.
Philippine Statistics Authority (PSA)
data showed that the country's total
export earnings reached USD 5.18B
in November 2014, higher than
the USD 4.32B posted
in November 2013.
The positive growth was mainly
brought about by the increase
in shipments of nine major commodities:
• coconut oil
• cathodes and sections of cathodes,
of refined copper
• machinery and transport
equipment
• chemicals
• woodcrafts and furniture
• ignition wiring set and other wiring
sets used in vehicles, aircraft,
and ships
• electronic products
• articles of apparel and clothing
accessories
• metal components.
“An increased demand for
Philippine-made products by Taiwan,
China, and the United States (U.S.)
likewise boosted this expansion,”
Deputy Director-General
and currently NEDA
Officer-in-Charge Emmanuel
Esguerra said.
“Manufactures continue to gain
from positive developments in
the global manufacturing sector,
as better performance of both
the electronics and non-electronics
segments pushed exports to a higher
growth path,” Esguerra said.
26 January 2015 7
STATWATCH
USD 2.40T Value
of ASEAN’s combined economy
as of 2012
USD 608.56B
Total intra-ASEAN trade
as of 4 Dec. 2014
P24.5B Investments approved
by the Board of Investments
(BOI) for the manufacturing sector
in 2014, up 77.5%
from P13.8B in 2013
USD 5.18B
PHL’s total export earnings
in November 2014, higher than
the USD 4.32B posted
in November 2013
USD 4.88B Foreign direct
investments (FDIs) that entered the
Philippines for the January
to September period in 2014,
already surpassing Bangko Sentral
ng Pilipinas’ (BSP) target
of USD 4.44B for 2014
626M Association of Southeast
Asian Nations (ASEAN) population
as of 2012
6,274 No. of PHL product lines
that can enjoy zero tariff under
the European Union’s Generalized
Scheme of Preferences
Plus (GSP+)
USD 3,852 ASEAN
economies’ average gross domestic
product (GDP) per capita as of 2012
203 Inbound business missions
to PHL as of end-November 2014,
96.7% more than the 210 conducted
in 2013
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Feature
AEC to take effect
by end-2015
T
he ASEAN Economic
Community (AEC) has been
rescheduled to take effect
by end-2015, aiming to transform
the region into an international
community with free movement of
goods, services, investment, skilled
labor, and free flow of capital.
Businesses based in a specific
member economy can locate in
another and export to the rest
of the region tax-free.
The original Association of Southeast
Asian Nations (ASEAN) member
countries, namely the Brunei,
Indonesia, Malaysia, Philippines,
Singapore, and Thailand, have already
eliminated 99% of all their tariffs while
Cambodia, Laos, Myanmar, and
Viet Nam are given enough time
to adjust theirs.
As of 2012, ASEAN already has 626M
population with a combined economy
of USD 2.40T, and average gross
domestic product (GDP) per capita
of USD 3,852.
The total intra-ASEAN trade was
placed at USD 608.56B
as of 4 December 2014.
Department of Trade
and Industry-Industry
Development Group
(DTI-IDG) Undersecretary
Adrian S. Cristobal Jr.
said Philippine industries have been
competing intensely since 2010
when all tariffs for agricultural and
industrial goods were eliminated,
except for live swine, live chicken,
meat of swine, meat of chicken,
Vol. 20, No. 02 8
tapioca (cassava) and sweet potatoes,
maize, rice, and sugar.
Cristobal said the Philippines is
competitive in the following products
as shown by their export performance:
• copper and articles thereof
• electronics
• machinery
• mineral fuels
• optical, photo, technical, medical
apparatus
• tobacco
• tramway
• vehicles other than railway.
“These products are among
our top ten exports to ASEAN,”
he said.
In services, he cited the information
technology-business process
management (IT-BPM) as one
industry where the Philippines enjoys
a competitive advantage.
DTI Secretary Gregory
L. Domingo said the country
is ready for the AEC.
“We are ready because we were
the first to liberalize in the region and
so we already know how to compete.
Trade liberalization is good for us,”
Domingo added.
“We are very competitive,” he added.
He said the Philippines’ liberalized
economy has equipped the
businesses to be competitive
in the global arena long before
the AEC’s realization this
December 2015. (MAB 01/01)
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26 January 2015 9
Title: Consumer
Reports buying
guide 2015
A synopsis of selected
book acquisitions
at the DTI-Library
Unless otherwise indicated with a
URL address, copies are available
for loan to DTI employees and for
research purposes only to external
clients. For inquiries/reservation,
please call 751.0384 local 2130 or
email dti.elibrary@dti.gov.ph
Publisher: Consumer Reports,
New York, 2014.
Call Number: 06.04.09/CON/2014
A compilation of product ratings and
recommendations for more than
1,999 brand-name products. This
guide gives expert reviews and advice
on electronics, home appliances,
supermarket items, and cars among
others to help consumers make smart,
informed buying decisions. Also gives
results of retailers surveyed that
delivers the best value for a product
service. 224p.
Title: Mobilizing
business for new
APEC services
agenda
Publisher: Geneva, International
Trade Centre, 2014
URL: http://www.intracen.org/
uploadedFiles/intracenorg/Content/
Publications/Mobilizing%20
business%20for%20new%20
APEC%20Services%20
agenda_04Nov-FIN.pdf
APEC Business Advisory Council
(ABAC) report on trade in services maps services business organizations
in Asia-Pacific and calls for business
to mobilize resources to advance
an enhanced APEC policy agenda
on services. 32p
Legend
MAB
TPS
- Manila Bulletin
- The Philippine Star
Editor-in-Chief/Patricia May M. AbejoManaging Editor/Vic S. Soriano Associate Editor/Resty P. Par Writers/Baby M. Reposo,
Jam H. Raposon, Hazel D. Sace, Joanna D. Cruz, Airiz A. Casta, Kit S. Andaya Design/Layout/Ren C. Neñeria Circulation/Al Aquino
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