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February 24, 2014 1

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In this issue
Focus PHL excels in 7 out of 8 competitiveness indices Inside DTI 1. DTI launches e-payment for BN registration 2. 10-% growth in BOI approvals seen 3. DTI to organize more trade fairs in 2014 Good News, Philippines! 1. Exports grow 18.9% in Nov 2013 2. Real estate investment destinations: MM 4th in Asia 3. Robust economy predicted for 2014

February 24, 2014 Vol. 19, No. 04

A bi-monthly digest of global and domestic industry trends and developments. Published by the Trade and Industry Information Center, Department of Trade and Industry Manila, Philippines Tel. (632) 895.3611 Fax (632) 895.6487 To subscribe, email: publications@dti.gov.ph Online: http://www.dti.gov.ph

MSME News 1. China looks to source seaweeds from PHL 2. DTI eyes honey industry expansion in La Union Business Update Furniture firms profit to expand by 10% in 2014; PHL to take part in more international trade fairs Consumers News KSA, UAE top countries with undelivered balikbayan boxes Statwatch Whats New?

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Vol. 19, No. 04 2

Focus
PHL excels in 7 out of 8 competitiveness indices

he Philippines improved in seven out of eight global competitiveness indices for 2013, the National Competitiveness Council (NCC) reported. Out of eight major competitiveness reports released last year, we recorded gains in seven of them and held ground in one. This is the first year this has been done, NCC Private Sector Co-Chairman Guillermo M. Luz said. Among the seven competitiveness rankings where the Philippines improved, it was in the Ease of Doing Business Report, produced annually by the World Bank (WB) and International Finance Corp. (IFC), where the country advanced the most last year.

Transparency Internationals

Corruption Perception Index (up 11 places to 94th out of 177); of Economic Freedom (up five places to 97th out of 177); Competitiveness Report (up 12 places to 82nd out of 140); and Organizations Global Innovation Index (up five places to 90th out of 142).

Heritage Foundations Index

WEFs Travel and Tourism

World Intellectual Property

Luz said much of the gains were the result of joint efforts by the public and private sector over the last three years. With the jumps in the rankings, Department of Trade and Industry (DTI) Secretary Gregory L. Domingo said the goal to be in the top third by 2016 is something that is not a stretch target anymore. This target has become quite achievable, and we may even surpass this target significantly. We are now in a position to take off because of our infrastructure, business procedures, and legal system. We are still behind developed countries, but we are significantly ahead of many of our peers, Domingo said. The Philippine economy has so far expanded above its 6%-7% target, averaging 7.4% in the first three quarters of 2013. For 2014 and 2015, the government is targeting gross domestic product (GDP) growth rates of 6.5%-7.5% and 7%-8%, respectively. Domingo said higher competitiveness rankings will also place the Philippines in a better position come the planned economic integration of the 10-member Association of Southeast Asian Nations (ASEAN) in 2015 since the country is already more competitive now than some of its neighbors.

From 138th place, the country improved by 30 spots to 108th out of 189 economies on the list, which tracks changes in regulations on domestic small and medium-sized companies. The country, WB Philippines Country Director Motoo Konishi said, had accomplished more than any other country measured last year. This is the first major improvement for the Philippines in the Doing Business ranking since the report started 11 years ago, Konishi said. The other competitiveness rankings where the Philippines clinched higher positions were:

World Economic Forums (WEF)

Global Competitiveness Index (up six places to 59th out of 148 economies);

International Institute for

Management and Developments 2013 World Competitiveness Yearbook (up six places to 38th out of 60);

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February 24, 2014 3

Inside DTI
1. DTI launches e-payment for BN registration

he Department of Trade and Industry (DTI) has launched the electronic payment (e-payment) facility for business name (BN) registration to make it easier for entrepreneurs to start a business in the country. Through this e-payment facility, entrepreneurs may register their BN without the need to visit the DTI office. Currently, the DTI has enlisted both Globes GCash and Bancnet for this e-Payment facility.

(eBNRS) and Philippine Business Registry System (PBRS) to the cloud environment in 2013, the DTI enhanced these systems to make them robust for additional functionalities and services such as the e-payment facility. With this e-payment facility in place, entrepreneurs can apply and renew their BN without going to the DTI offices, and enjoy the convenience of paying the applicable fees online through their computers or mobile phones, Terrado said. The e-payment facility was made possible in partnership with BancNet, Development Bank of the Philippines (DBP), Globe Xchange, Inc. (GXI), and Landbank of the Philippines (LBP). She also said that registering a BN can also be done online through the PBRS website at www.business.gov.ph where entrepreneurs can avail themselves of other government-related services such as Taxpayer Identification Number (TIN) validation and/or creation with the Bureau of Internal Revenue (BIR) and application of Employers Registration Number (ERN) with Pag-IBIG Fund, PhilHealth, and Social Security System (SSS) in less than 40 minutes. Last year, the DTI registered 335,266 new and renewing BNs. Of this, a total of 41,658 new and existing BNs registered through the PBRS.

In assuring entrepreneurs of an enabling business environment, the government is gathering institutions and partners from the private sector to work on key reform areas in line with President Benigno S. Aquino IIIs policy thrust anchored on good governance and transparency, DTI Secretary Gregory L. Domingo said. The e-payment facility for BN registration is one of the projects that the DTI is implementing to simplify the process of dealing with the government as entrepreneurs start and run their businesses, Domingo added. He said the DTI aims to create a favorable environment for both foreign and local businesses to flourish. DTI Undersecretary for Management Services Group (MSG) Nora K. Terrado said after migrating the Enhanced Business Name Registration System

2. 10-% growth in BOI approvals seen

he Board of Investments (BOI) is eyeing at least a 10-% hike in project approvals this year to reach P443B as it expects more robust activities from local and foreign firms. Last year, BOI-approved projects amounted to P403.17B largely

due to the rise in the number of capital-intensive power generation projects. A 10-% growth is a reasonable growth projection for approved investments. What we aim for, however, is its impact in terms of stable and decent jobs for a more

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inclusive growth, Department of Trade and Industry (DTI) Undersecretary for Industry Development and Trade Policy Group (IDTPG) Adrian S. Cristobal Jr. said. The momentum could be attributed to the strong domestic consumption coming from the sheer size of the domestic market, reconstruction spending, and the expected increase in infrastructure spending; and to the countrys stable macroeconomic condition, Cristobal said . He added the global economys expected modest growth, the United States (U.S.) improving economic performance, Japans continued recovery due to the so-called Abenomics, China and South Koreas strong growth, and the fast growth expected in Southeast Asia could boost investment growth in the country. In terms of sectors, the growth drivers will most likely be the construction, business process outsourcing (BPO), telecommunications, wholesale and retail trade, consumer durables, housing, tourism, and the whole manufacturing sector, he said.

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Foreign direct investments (FDIs) are also expected to continue to increase, while exports are seen to recover. DTI Secretary Gregory L. Domingo said he expected the countrys FDIs to grow by as much as 20% this year to USD 4.8B on the back of foreign investors increased interest in the Philippines. Wherever we go, there is such a huge interest in the Philippines from foreign investors. We went to Europe earlier and just came back from Japan, where we met with representatives of various companies. There was evidently overwhelming interest. It was almost too good to be true, Domingo said. For 2013, Domingo is confident that the Philippines could surpass the FDI target of about USD 4B, 43% higher than the actual FDIs in 2012 of USD 2.8B. As of endSeptember 2013, FDI flows stood at USD 3.1B, which was 10% higher than the year-ago level.

3. DTI to organize more trade fairs in 2014

o boost domestic trade for the countrys micro, small, and medium enterprises (MSMEs), the Department of Trade and Industry-Bureau of Domestic Trade (DTI-BDT) is planning to organize more domestic trade fairs this year. DTI Undersecretary for Trade and Investment Promotions Group (TIPG) Ponciano C. Manalo Jr. said the DTI intends to have six domestic trade fairs in priority sectors such as food, fashion, arts, and furniture and furnishings for 2014. Last year, we organized two domestic trade fairs to provide opportunities for our MSMEs

to sell their products in the domestic market and eventually make their way in the international market, Manalo said. Through national food and handicrafts fairs under its new Sikat Pinoy brand, the DTI brought together 577 MSMEs from the countrys 16 regions. To encourage market expansion of thriving MSMEs supported by the BDT, we will continue to facilitate their participation in international trade fairs such as the International Food Exhibition (IFEX) and the Manila Furnishings and Apparel Manufacturers Exchange (FAME), Manalo said.

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Manalo added that aside from promoting their products in these fairs, fair participants will also be provided with product design and development services. We will also continue to organize product-sourcing missions to facilitate trade between MSMEs and buyers from big trading houses and consolidators. These missions were also designed to provide MSMEs with useful information to improve their product marketability, Manalo said.
Select 2013 trade fairs and sales generated Trade Fair Sales (in million pesos) 72.2 51.3 46.7 33.9 13.8 1.6 1.4 0.9

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services and organize workshops and seminars on marketing for MSMEs. It will also operate the new Domestic Trade Exchange Portlet (DTEx) to provide trade fair information, process fair applications, and perform market-matching activities. Manalo also said the DTI will maintain its showroom for MSMEs as well as trade and industry associations to display and sell their products during the entire year.
DTI Showroom occupants and sales generated

Manila FAME (March edition) Sikat Pinoy National Handicrafts Fair IFEX Manila FAME (October edition) Sikat Pinoy National Food Fair Bohol Sandugo Trade Fair Aklan Fiber Festival Quezon Trade Fair

MSMEs supported by DTI-NCR P1.55M Philippine Exporters Confederation, Inc. (PHILEXPORT) Southern Tagalog - P708,845 Buy Pinoy Movement P622,102 MSMEs supported by DTI-CAR P446,921

He also mentioned that DTI will carry on its merchandise consultancy or clinics wherein trade experts advise micro and small enterprises on product quality, competitiveness, and promotion. In 2013, these marketing clinics were organized for enterprises in the Cordilleras and community-based associations from Sulu, Sultan Kudarat, Maguindanao, and Palawan. To further promote homegrown products, the BDT will continue to provide its direct matching

Manalo also mentioned that through collaborative efforts with the private sector and local government units (LGUs), DTI continued to promote and monitor the Tindahang Pinoy stores in Cebu, Davao, and Pampanga. Through these stores, we intend to provide MSMEs with a venue to promote the best homegrown products from various regions through an organized supply channel, Manalo said. Last year, these stores offered 1,427 products and additional 489 products available online, with total sales amounting to P12M.

Good News, Philippines!

1. Exports grow 18.9% in Nov 2013

he countrys exports grew 18.9% to USD 4.3B in November 2013 from USD 3.6B a year ago, fuelled by the double-digit growth of agricultural products and manufactured goods, according to the National Statistics Office (NSO).

The buoyant export performance of manufactured products, driven primarily by electronics, reflects gains from the revival of the manufacturing sector as one of our growth drivers, Economic Planning Secretary Arsenio M. Balisacan said.

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Exports of manufactured goods sustained a double-digit growth of 16.9% in November 2013, registering a total value of USD 3.7B during the period.
Export growth drivers in Nov 2013 Manufactured goods - electronic products - garments - wood manufactures - chemicals - machinery and transport equipment Agricultural products - bananas - fish products - centrifugal and refined sugar - desiccated coconut - tobacco

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On a related note, National Economic and Development Authority (NEDA) reported the countrys export earnings could post double-digit full-year growth this year on the back of base effects and the recovery in the United States (U.S.). This is because of a low base and if the recovery in the U.S. proceeds. Recovery in Europe is not yet there. Indirectly, theyre still your final market. Were part of the value chain in Asia and, indirectly, Europe is still our final consumer, NEDA Assistant Director General for National Planning and Policy Rosemarie G. Edillon said. The Philippines bested other East and Southeast Asian countries in terms of export growth in November. Balisacan said Viet Nam and China posted export growths of 15% and 12.7%, respectively, in November 2013. We were the top export performer among major trade-oriented economies in East and Southeast Asian region, Balisacan said. (BMI 01/10) Manila is among the big movers in the survey given the success in the impact of the business process outsourcing (BPO) and strong gross domestic product (GDP) growth, ULI Chief Executive Officer (CEO) for Asia Pacific John Fitzgerald said.
Emerging Trends in Real Estate Asia-Pacific 2014: Top investment destinations 1. 2. 3. 4. 5. Tokyo Shanghai Jakarta Manila Sydney 6. Guangzhou 7. Singapore 8. Beijing 9. Osaka 10. Shenzhen

Electronics, which comprised over half of exports receipts from manufactured goods, was up by 10%, consistent with the projected gradual recovery in worldwide sales of personal computers and an uptick in global consumer confidence. Exports agro-based products grew by 38.1% to USD 265.4M in November 2013 from USD 192.2M in the comparable period in 2012.

2. Real estate investment destinations: MM 4th in Asia

etro Manila has emerged as one of the top five real estate investment destinations in Asia-Pacific, according to a report published by the Urban Land Institute (ULI) and PricewaterhouseCoopers.

The Emerging Trends in Real Estate Asia-Pacific 2014 report showed Metro Manila went up eight places from the previous year to rank 4th in terms of investment prospects for real estate. The report, which covered 23 urban areas in Asia-Pacific, showed Metro Manila placing 8th in terms of development prospects. The rankings are based on the survey and personal interviews of 250 of the most influential leaders in the real estate industry.

The report cited the latest result that showed investors growing awareness that the problems long associated with lack of transparency and governance issues in the country have improved.

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The country also benefits from young demographic, strong capital inflows from local citizens working overseas,

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and a workforce with a cultural affinity with the West, the report read.
(TPS 01/11)

3. Robust economy predicted for 2014

conomists and industry members are positive that despite growth decelerating in the last stretch of the previous year due to Typhoon Yolanda, the recovery efforts will keep 2013s economic posting at 7% and pull 2014s growth up to 7.5%. The government has earmarked P361-B budget for the next four years for the Reconstruction Assistance on Yolanda (RAY) seen to contribute 1% to this years growth that will otherwise reach only 6% to 6.5%. The government previously predicted that 2013 economic performance will be at 6%-7% while the private sector expected it to be at 7%. For this year, the government is looking at a 6.5%-7.5% growth.

As of October 2013, economic growth was at 7.4%, with the first half of the year posting at 7.7%.
(MAB 01/03; TMT, BWD, BMI 01/06)

Other forecasts

Remittance growth: 6%-7% Domestic demand: 8% Consumption spending: 6.2% Investment spending: 16%20% Industry sector growth: 9.7%mostly Services sector growth: 7%mostly
from manufacturing and construction from business process outsourcing (BPO) and tourism Exports growth: 6%-10% Imports growth: 8%-12% Peso-Dollar rate: average P43-36=USD1 Philippine Stock Exchange (PSE) Index level: 6,300-6,500 for construction expenses

Economic growth indicators Global recession recovery Recovery of export markets

MSME News
1. China looks to source seaweeds from PHL

eaweed producers in Mindanao are encouraged to increase their production to meet the supply demand of Chinese businesspeople. Together with Chinese and Filipino-Chinese businesspeople who showed keen interest in the Butuan Citys seaweed production, the Peoples Republic of China (PRC) Consulate General had visited the province recently. The existing local seaweed industry production is, however, insufficient to supply Chinas requirements, so much so that even local buyers for carrageenan production import from Indonesia to meet their needs. Produced from dried seaweeds for consumer and industrial use, carrageenan is exported by local manufacturers to China, Europe, and the United States (U.S.).

Dried seaweed currently fetches a price of P36-P46 per kilo while species of seaweed sold fresh for use as side table dish is priced at P4-P5 per kilo. The seaweed industry cluster looks to boost support for seaweed farmers by the local officials of Samal by setting a meeting with local officials to discuss projects and hopefully sign a memorandum of understanding (MOU). (MAB 01/11)
Mindanao seaweed industry clusters

Agusan Basilan Sulu

Surigao Tawi-tawi Zamboanga

Local carrageenan processing plant locations

Davao Surigao Zamboanga

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Vol. 19, No. 04 8

2. DTI eyes honey industry expansion in La Union

he Department of Trade and Industry (DTI) turned over a shared service facility (SSF) to La Union to address the planned expansion of honey production in the province. The facility, which includes machines and equipment needed to construct the necessary materials to start beekeeping activity, were provided to ensure adequate supply of raw honey to be processed into various products in the Honeybee Center in Bacnotan, La Union.

DTI-1 Information Officer Amy Galvez said the sustained honey production will provide the farmer-beneficiaries a regular income source to help them improve their quality of life.
Honey-producing areas in La Union to be part of the expansion

Balaoan Bagulin Bauang

Burgos San Fernando Sudipen

Business Update
Furniture firms profit to expand by 10% in 2014; PHL to take part in more intl trade fairs

he Philippine Exporters Confederation Inc. (PHILEXPORT) said local furniture-makers see a 10-% growth in revenues this year given the robust demand here and abroad. PHILEXPORT Trustee for the Furniture Sector Myrna C. Bituin said some local companies had opted to focus on serving local demand. She added that exports are seen to continue increasing despite the slowdown in demand from the United States (U.S.). This year, the Department of Trade and Industry (DTI) will make an aggressive pitch for the local furniture and furnishings industries in the global arena, as it targets to participate in more trade fairs this 2014.

Some trade fairs the Philippines plans to join

Foodex Show (Tokyo) Gulfood (Dubai) The Hotel Show (Dubai) Sial (Paris) Salone Internationazionale del Mobile (Milan) Fashion Access (Hong Kong)

The Center for International Trade Expositions and Mission (CITEM) in particular had committed to join more trade fairs in the U.S., Europe, Middle East, and Asia. DTI Undersecretary for Trade and Investment Promotions Group (TIPG) Ponciano C. Manalo Jr. announced that aside from the fairs they plan to participate in, they will also hold their signature event Manila FAME in March and October.
(PDI 01/05)

Consumer News
KSA, UAE top countries with undelivered balikbayan boxes

he Department of Trade and Industry-Philippine Shippers Bureau (DTI-PSB) recorded that the Kingdom of Saudi Arabia (KSA) and United Arab Emirates (UAE) were 2013s top countries with many undelivered seafreight balikbayan box shipments complaints. Out of the 149 total complaints, 25% or 37 came from KSA while 21% or 31 were shipped from the UAE.

Consumer Welfare and Business Regulation Group (CWBRG) Officer-in-Charge (OIC) Victorio Mario A. Dimagiba advises the public, especially the overseas Filipinos (OFs), to send their balikbayan boxes to foreign consolidators which have DTI-accredited agents or freight forwarders in the Philippines. The non-delivery of balikbayan box usually occurs when its incoming shipments are abandoned

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at the Philippine ports for failure of unscrupulous foreign consolidators to remit necessary funds to their Philippine agents for the delivery of cargoes to consignees, Dimagiba said. DTI urges consumers to avoid becoming victims of unscrupulous cargo forwarders and check the list of DTI-accredited sea freight forwarders and monitor regular advisories and alerts at www.dti.gov.ph, he added.
Foreign consolidators/principals that do not remit to PHL agents KSA-based firms Caravan Cargo Agency Cargo Net Worldwide Services (formerly FAL-World Express Cargo) Fil-Arab International Cargo Global Cargo Jonar Cargo Kabalen Forwarders Mohsen Cargo Services North and South Express Cargo PC Worldwide Cargo Sir Cargo Forwarders WRJ Freight Forwarders (A Division of Al-Zagel Cargo) UAE-based firms Al Rodah Marine Cargo Cityline Cargo Dagupan Cargo Packaging Services Express Link Cargo Services Smooth Express Grace Express Cargo Not DTI-accredited Philippine agents KSA-based consolidators Megatop Express Cargo Forwarder Manila Broker J.J. Transglobal Brokerage Jonar Cargo RGC Green Logistics Kabalen Forwarders R&M Cargo Services Sir2Go Forwarders UAE-based consolidators Rodah Cargo Manila VCG Customs Brokerage Revoked DTI-accredited freight companies Aeroworld Logistics Phil., Inc. D Winner Logistics Phils., Inc. DXL International Freight Forwarder, Inc. ECFS International Forwarding, Inc.

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STATWATCH USD 4.3B Value of exports

recorded for November 2013

P443B BOIs expected value

of investments this year, to grow 10% from last year

P2.1B Freeport Area of Bataans

earnings from FDIs in 2013

from eight DTI-led trade fairs in 2013 Sales generated from DTI Showroom for 2013 Number of new and renewing business names registered with DTI last year

P221.8M Sales generated P3.3M

335,266

in Free Trade Areas (DBFTA) lectures conducted by DTI in 2013

125 Doing Business

10% Expected increase in profits

of furniture firms for 2014

7 Number of competitiveness indices out of 8 4th Metro Manilas ranking

as investment destination in Emerging Trends in Real Estate Asia-Pacific 2014 Report where PHL improved on

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Vol. 19, No. 04 10

Whats New?
(A synopsis of selected book acquisitions at the DTI-TIIC library)

Title : What Have We Learned from the Enterprise Surveys Regarding Access to Credit by SMEs Publisher : World Bank Authors : Kuntchev, Veselin/Ramalho, Rita/Rodriguez-Meza, Jorge Call Number : 00 000/04.03/WB/2013 This paper develops a new measure of credit-constrained status for firms using hard data instead of perception data. It classifies firms into four ordinal categories not credit constrained, maybe credit constrained, partially credit constrained, and fully credit constrained to understand the characteristics of the firms that fall into each group. It also tries to explain what type of credit SMEs use to finance their working capital and their investments. It provides an innovative way of measuring credit constrained firms based both on their usage of and ability to obtain new credit. 39p

Title : Guidebook on SME Business Continuity Planning

Publisher : Asia-Pacific Economic Cooperation (APEC) Call Number : 03.08.05/APEC/2013 This guidebook is intended to help small and medium-sized enterprises (SMEs) introduce business continuity plan (BCP), the solution for protecting business during crisis. It presents 10 easy steps that SME readers can follow to develop their own BCP. In each step, forms have been prepared to assist readers. 60p.

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Editor-in-Chief/Anne L. Sevilla Managing Editor/Vic S. Soriano Associate Editor/Jam H. RaposonWriters/Resty P. Par, Hazel S. Dizon, Joanna D. Cruz, Airiz A. Casta, Kit S. Andaya Design/Layout/Ren C. Neneria Circulation/Myrna V. De Los Reyes To subscribe, email: publications@dti.gov.ph