LICMOAN, Gaddiel Joy E.

BSBA HRM 2-1

EMBARGO:
Philippines bans Japan milk chocolates; global embargo widens
MANILA, Philippines—Bureau of Animal Industry (BAI) Director Efren Nuestro
Thursday said he had issued “verbal orders” banning Japanese chocolate milk
products shipped to the Philippines after the March 11 earthquake, as more
countries shunned food imports from quake-hit Japan. Russia, Australia, Canada
and Singapore were the latest to join the list of countries which had banned
Japanese food imports as radioactive steam wafted anew from the crippled
Fukushima Dai-ichi Nuclear Power Station, stoking global anxiety. A formal order
“is being drafted” canceling a previous clearance for the import of Japanese
chocolate milk products, Nuestro told the Inquirer.

“We will recall the veterinary quarantine clearance for chocolate milk products that
were shipped into the Philippines after March 11,” Nuestro said. The BAI and the
Bureau of Fisheries and Aquatic Resources (BFAR)—both under the Department
of Agriculture—said they would screen animal-based products from Japan for
abnormal radiation levels and recommend the suspension of the importation of
suspect items. Nuestro said food items that were in market shelves before the
earthquake were safe to eat. The Philippines does not import meat, like beef, from
Japan, he said.

Mackerel

BFAR Director Malcolm Sarmiento said the government also would conduct
random sampling of mackerel from Japan to determine if they have a high
radioactivity level. Sarmiento said the Philippines imported 4,000 tons of mackerel
from Japan last year for food processing. Philippine customs authorities were also
keeping a close watch on any imports from areas of Japan that were close to the
stricken nuclear plant, Rico Capulong, quarantine officer at the port of Manila, told
Agence France-Presse. “Not all parts of Japan were affected. There are certain
areas that we are concentrating on,” Capulong said. Any product coming from
those areas would be tested for radiation, he said. The Philippines exports more
food to Japan than it imports. Most of the products the Philippines buys from Japan
are manufactured items, such as noodles and tea.

Seafood, seaweed
The United States and Hong Kong have already restricted the importation of
Japanese food, and France wants the European Union to do the same. Russia
ordered a halt to food imports from four prefectures near the crippled Fukushima
nuclear plant, 250 kilometers northeast of Tokyo. Australia also banned produce
from the area, including seaweed and seafood, milk, dairy products, fresh fruit and
vegetables. But Australia said that Japanese food already on store shelves was
safe, as it had been shipped before the quake, and that “the risk of Australian
consumers being exposed to radionuclides in food imported from Japan is
negligible.” Singapore also suspended imports of milk products and other
foodstuffs from the same four prefectures—Fukushima, Gunma, Ibaraki and
Tochigi. Canada implemented enhanced import controls on products from the four
prefectures.

Right actions

“Food safety issues are an additional dimension of the emergency,” three UN

agencies said in a joint statement issued in Geneva, pledging they were
“committed to mobilizing their knowledge and expertise” to help Japan.
Japan was taking the right action, said the International Atomic Energy Agency,
World Health Organization, and the Food and Agriculture Organization. “Food
monitoring is being implemented, measurements of radioactivity in food are taking
place and the results are being communicated publicly,” the three agencies added.
The anxiety was compounded by the Japanese government’s revelation on
Wednesday that radioactive iodine in the drinking water was more than twice the
level deemed safe for infants, although it remained within safe adult limits.

Contaminated veggies

The Japanese government has also halted shipments of untreated milk and
vegetables from Fukushima and three adjoining prefectures, and stepped up
radiation monitoring at another six, covering an area that borders Tokyo. The
health ministry has detected 82,000 becquerels of radioactive caesium—164 times
the safe limit—in the green vegetable kukitachina, and elevated levels in another
10 vegetables, including cabbage and turnips.

Philippines bans pork imports from 3 countries

The Philippines expanded the ban on pork imports to three more countries—
Myanmar, Serbia and South Korea—affected by African Swine Fever (ASF).
These three countries were added in the updated list of the Bureau of Customs
(BOC) contained in a Sept. 18 memorandum issued by Deputy Commissioner
Edward James A. Dy Buco to all district and sub-port collectors. To date, the
Philippines hasbanned importation of pork and pork-based products from 22
countries and territories, which also included Belgium, Bulgaria, Cambodia, China,
Czech Republic, Hong Kong, Hungary, Laos, North Korea, Latvia, Moldova,
Mongolia, Poland, Romania, Russia, South Africa, Ukraine, Vietnam and Zambia.

“All district collectors, sub-port collectors and all other concerned are directed to
coordinate with DA-BAI (the Department of Agriculture’s Bureau of Animal
Industry) personnel in all international air and sea ports for the conduct of rigid
inspection especially on the checked-in and hand-carried luggage of all incoming
passengers from ASF-affected countries, and confiscate and destroy all pork and
pork-related products coming from the said countries within 24 hours from
interception,” Dy Buco said. In an earlier Aug. 27 memorandum, Customs
Commissioner Rey Leonardo B. Guerrero also ordered to prohibit the discharge of
kitchen leftovers, refuse and food waste from foreign aircraft and vessels to avoid
ASF. “Due to the growing concern on the continuous spread of ASF of which no
treatment or vaccine has yet been developed, there is a clamor for the observance
of stringent quarantine protocols. Consequently, kitchen refuse/leftovers/food
waste, due to possible commingling with ASF-infected pork and pork-based
products, from arriving foreign vessel or aircraft whose last port-of-call is an ASF-
affected country is considered a high-risk path of introduction of the causal virus to
the healthy population,” Guerrero explained. Under Section 118(g) of the Customs
Modernization and Tariff Act (CMTA), Guerrero said these food wastes from ASF-
affected countries are prohibited.

PHL essentially implementing import ban on vapes now

The Philippines is essentially implementing an import ban on vapes now through
various "trade barriers," House Committee on Ways and Means chair Joey
Salceda said Monday. In an interview with reporters, Salceda said the Ninoy
Aquino International Airport (NAIA) is currently disallowing entry of vape imports
as they do not have not secured permit from the Food and Drug Administration
(FDA). "Yung kolektor ng NAIA ay nagsabi na hindi na nila pinapayagan tsaka
yung dumaan, meron silang 1,457 na mga vapes na hindi nila pinapalabas at
hindi na nila pinapapasok dahil walang permit mula sa FDA," he said.

The National Tobacco Administration has also stopped giving permits to vape
importers to transport their products in the country, Salceda said. "In short, we
have an import ban essentially on vape through what you can call trade barriers,"
he added. President Rodrigo Duterte earlier ordered law enforcers to arrest vape
smokers in public as he announced a ban on its use and importation, saying that
it is harmful to the body and endangers public safety. Salceda, however,
expressed concern that imposing a ban on the importation of vaping products
would only force importers to go underground. "Kung ang import ban ay baka
lang naman ay we push them underground, baka lalo lang lumaki yung injuries to
health kasi nga that is in the nature that all prohibition does not work and leads to
more harm," he said. He added that Customs officials have intercepted more
than 60 cartridges of liquified marijuana, and vapes are "actually facilitating the
use of this liquified marijuana."

"That makes this issue more complex, therefore kailangan may mas magandang
regulation, mas magandang taxation, and lastly of course, kailangan natin ng
enforcement," Salceda said. Salceda earlier said that the House will not lift its
proposal to impose additional taxes on vaping products despite Duterte' ban. The
House has already approved on third and final reading House Bill 1026, which
seeks to increase taxes on alcohol, some tobacco and vaping products. Around
P1.4 billion in government revenues is expected to be generated from the taxes
on vapes to be used to fund the implementation of the Universal Health Care
Law, Salceda said. —KBK, GMA News

EXCHANGE CONTROL:

Philippines Central Bank Eases Foreign Exchange Regulations

The central bank for the Philippines, the Bangko Sentral ng Pilipinas
(BSP) recently announced that it has eased restrictions on foreign exchange
(forex) transactions with a host of new regulations. According to a circular
released by BSP, consumers will now be able to purchase $500,000 in funds
without furnishing documents while for corporations the limit has been
enhanced to $1 million. Applauding the decision, Wick Velasco
President, HSBC Philippines who also functions as Chairman of the Bankers
Association of the Philippines (BAP) Open Market Committee said the public
would now be able to deal with regulated financial institutions making the
financial system more secure.
The earlier restrictions limited forex transactions without documents at
$120,000 for both individuals and corporations. Anything beyond that required
supporting documents and approval from BSP,which made the process
tedious and resulted in many choosing to deal in the black market. In a
statement Wick Velasco, said,The country becomes a safer place to transact
because it allows you to deal with financial institutions, makes it convenient for
clients to transact. It’s good for the public who needs foreign exchange.
Velasco pointed out that with lesser requirement of documentation, bank
customers will be able to buy foreign currencies without having to go through
the bank. He added that this relaxation in forex rules also reduced the use of
counterfeit notes

The central bank has also introduced other changes that ease the movement
of forex. As part of the new rules, forex purchased from a bank can now be
deposited directly to a foreign currency bank account or a foreign currency
deposit unit (FDCU). Earlier a mandatory wait period of three days was
required before the money could be remitted, as it needed to be reviewed by
the BSP. The rule was in place to counter any market uncertainty from
currency transactions. The new regulations also allow for conversion of loans
into pesos without approval from the central bank. Velasco said that this
allowed multinational firms to loan funds to their subsidiaries easily without the
additional delay and documentation. Velasco also highlighted that banks will
be able to provide financial advice to customers and offer the convenience of
offering a full package of forex services. HSBC has forecasted that the
country’s currency will strengthen in the coming months as a result of it having
successfully transitioned to a new government and a new interest rate
corridor. It has predicted that it will reach 45 pesos against the dollar.

Argentina imposes exchange controls to calm markets

Argentina on Sunday imposed foreign-exchange controls on exporters as it

closed out a week of financial uncertainty that saw a sharp drop in the peso.
August 29, 2017, twenty and five dollar bills are shown in San Anselmo,
California. Argentina has made transferring money abroad require a government
OK; those seeking to buy dollars now face a monthly limit of 10,000 (AFP /
MANILA BULLETIN)

Exporters were ordered to seek permission from the Central Bank of Argentina
before purchasing foreign currency, according to a decree published in the
Official Bulletin. In other new measures, transferring money abroad will now
require government permission. And individuals seeking to buy dollars now face
a monthly limit of 10,000 greenbacks. But there are no restrictions on people
withdrawing dollars from their bank accounts — a practice known here as the
“corralito,” applied in late 2001 and the spark for the worst economic and political
crisis in Argentine history. All these new measures will be in place until
December 31.
Last month, markets were rattled when pro-business President Mauricio Macri
suffered a huge loss in primary elections, and his leftist opponent in October
presidential elections Alberto Fernandez emerged as the favorite. The decree
published Sunday said the currency measures were needed temporarily to
“regulate more intensely the currency exchange regime and strengthen the
normal functioning of the economy.”

Argentina has been in recession since 2018, and is battling rising unemployment
and one of the world’s highest inflation rates, running at more than 55 percent. In
a bid to calm market turbulence, last week Argentina asked the International
Monetary Fund to restructure its debt payments on a $56 billion bail-out loan
agreed last year. The IMF said it was studying the new measures taken by the
Macri government. “Staff will remain in close contact with the authorities in the
period ahead and the Fund will continue to stand with Argentina during these
challenging times,” the Fund said in a statement.

The Central Bank bought $300 million in pesos on Tuesday to try to calm
markets but the currency still depreciated by almost 2.5 percent. The currency
weakened by 20 percent alone in the week after the primaries while the Buenos
Aires stock exchange dropped by 30 percent. Just under two weeks ago, ratings
agencies Fitch and S&P downgraded Argentina’s credit rating from “B” to “CCC”
and “B-” respectively. Fernandez romped to victory in what was essentially a de
facto opinion poll, with 47 percent of the vote to Macri’s 32 percent. Such a result
in October’s election would send Fernandez — who has been highly critical of
the IMF loan — to the presidential palace without need for a run-off in November.

Foreign exchange controls relaxed anew

THE central bank has unspooled a new set of rules governing foreign exchange
(FX) transactions, further extending a wave of liberalisation seen in the past
decade meant to make access to foreign currency easier both for individuals and
businesses. In a statement on Friday, the Bangko Sentral ng Pilipinas (BSP) said
the revised foreign exchange rules take effect on Sept. 15.

By then, individuals can buy as much as $500,000 from any local bank without
any supporting documents, higher than the previous $120,000 limit. For
companies, the cap is hiked to $1 million, where only an application form to
purchase foreign currency needs to be submitted. “This policy aims to enhance
and further facilitate access to FX of both individuals and corporates for
legitimate non-trade current account transactions,” the BSP’s statement read.
The move forms part of “continuing efforts to keep regulations appropriate for the
changing needs of the Philippine economy” and “the thrust towards greater
openness in view of the country’s increasing integration with global markets,” the
central bank added.

The regulator also raised the amount of cash travellers can bring in and out of
the country to P50,000 from P10,000 previously, citing the need for “greater
convenience” among those frequently in transit. The current P10,000 cap was
last adjusted in 1995. Any person going in or out of the country who wants to
carry more than P10,000 would first have to secure an authorization from the
BSP through its International Operations Department. Other reforms to be put in
place include allowing individuals to temporarily deposit dollars they purchased in
their banks’ foreign currency deposit unit (FCDU) accounts before sending the
sum to a foreign beneficiary -- a move seen to lend “greater flexibility” for the
public in managing their cash flows, the BSP said. To simplify access to bank
financing, the central bank will also lift rules that require a private firm to secure
the BSP’s approval and registration for incurring dollar loans through a local
bank’s foreign currency unit.

Also, the BSP would soon allow banks and their currency exchange firms to sell
dollars for resident-to-resident transactions. “This measure will facilitate payment
by residents of obligations to their resident counterparties and allow further
diversification of residents’ investments,” the central bank added. BSP Deputy
Governor Nestor A. Espenilla, Jr. said in April that regulators were working on
new rules to make it attractive to course foreign exchange through banks by
simplifying requirements, so as to recapture the business which has moved to
non-bank dealers. “The view is that more transactions can be done with banks
rather than money changers, for example... Banks are more diligent about
following the rules simply because they are better governed and also they are
more formal organizations,” Mr. Espenilla earlier said.

The moves came in the wake of “reputational risks” which stemmed from the
$81-million cyber heist, which highlighted gaping holes in the country’s regulatory
laws particularly given the involvement of remittance firm PhilRem Service Corp.

“Not withstanding the liberalized rules, banks are expected to continue to adopt
safe and sound practices in their FX transactions and dealings with clients/other
counterparties. The BSP, for its part, will remain vigilant and stand ready to act to
keep the FX market stable,” the central bank said of the new rules. The new set
of rules follows previous changes covering FX transactions introduced earlier this
year, which allowed foreigners with disapproved subscriptions to stock rights
offerings of public firms to directly convert their peso investments to a foreign
currency in a bid to attract more investors. The BSP has already allowed thrift,
rural, and cooperative banks to buy and sell foreign currencies. Companies
pursuing energy or power-related projects may also secure offshore credit or
dollar loans from banks’ FCDUs without prior central bank approval. The central
bank has been liberalizing its foreign exchange rules in several waves since
2007 to make the regime responsive to current conditions and competitive by
making it easier for firms and individuals to transact in the country using other
currencies. -- MLTL

IMPORT QUOTA:

Philippines extends rice import quota foar 3 years

MANILA – The Philippines has decided to extend for three more years its
quantitative restriction (QR) for rice, a measure that can benefit local farmers,
according to a government document released Monday. President Rodrigo
Duterte signed Executive Order 23, which adopts the recommendation of the
National Economic Development Authority (NEDA) to extend the reduction of
duties on certain agricultural products.

This as the June 30 deadline for the Philippines to lift its quantitative restriction
on rice as part of its commitments to the World Trade Organization (WTO)
loomed. Agriculture Secretary Manny Piñol supports the extension of quantitative
restriction as this aims to protect Filipino farmers from cheap agricultural
imports. In exchange for the extension of reduced tariffs on rice, the government
has agreed to allow rice imports with lower tariffs at a restricted amount, called
the Minimum Access Volume (MAV).

MAV is currently set at 805,200 metric tons. The EO said this amount would
remain in force. The Philippine Institute for Development Studies (PIDS), in a
presentation to Congress, has said one of the options for the Philippines was to
request for another waiver to extend the reduced tariffs. The Philippines can also
maintain the QR regardless of the decision of the WTO, but this will subject the
country to a possible lawsuit from another WTO member.

China Won’t Raise Grain Import Quotas For U.S., Official Says

China will not increase its annual global import quotas for certain grains due to a
phase one trade deal with the U.S., a senior Chinese agriculture official told
Caixin on Saturday. China’s promise to expand imports of American agriculture
products as part of the phase one China-U.S. trade deal has sparked speculation
that the nation may adjust or cancel its global quota for corn in order to meet a
target for imports from the U.S. Han Jun, a member of the Sino-U.S. trade
negotiation team and vice minister of agriculture and rural affairs, denied those
suspicions at a conference in Beijing, saying: “They are quotas for the whole
world. We will not change them just for one country.”

In recent months, U.S. President Donald Trump and his administration have
repeatedly said China would buy $40 billion to $50 billion of American agricultural
products every year after the phase one deal is signed, according to multiple
media reports. But the Chinese side has not confirmed this aspect of the
agreement, saying (link in Chinese) in December that the deal text remained
under review. China’s annual global import quotas for wheat, rice and corn have
not been used up in recent years, so there is significant room for import
expansion regardless of quota adjustments. In 2018, for example, China’s
imports of wheat, rice and corn were around 3.1 million, 3.1 million, and 3.5
million tons respectively, according to Chinese customs data (link in
Chinese). Import quotas (link in Chinese) for those products have not been
changed for 16 years, and remain 9.6 million, 5.3 million, and 7.2 million tons,
respectively, for 2020.

Meeting the target the U.S. claims will require an extremely dramatic expansion
of imports. Han noted in a briefing (link in Chinese) last month that China
imported just $10.4 billion of American agricultural products in the first 10 months
of 2019, after steep declines over the last two years amid escalating tariffs. He
said that China will expand imports of American soybeans, pork and poultry after
signing the trade deal, in a bid to make up for domestic supply shortfalls.
Trump said last month in a tweet that he will sign the phase one trade deal with
China on Jan. 15 at the White House. As part of the deal, the U.S. will halve
tariffs imposed on a $120 billion segment of Chinese imports to 7.5% and halt
plans to impose new additional tariffs which were originally set to take effect Dec.
15, according to the Trump administration. In return, China promises to increase
purchases of U.S. goods and services by $200 billion from 2017 levels over the
next two years, according to a Dec. 13 statement from the United States Trade
Representative. China sets tariff quotas for key grain imports, charging tariffs of
1% to 10% on imports of different kinds of wheat, rice and corn within the quotas,
and charging a most-favored-nation duty from 10% to 65% for those outside the
quotas in 2020, according to documentation (link in Chinese) from tax authorities.
China’s imports of those three grains account for a tiny part of the country’s
consumption, and the government prioritizes self-sufficiency due to food security
concerns. According to a recent white paper, China self-supplies 95% of its
cereal demand. “The main driver of (rice and wheat) imports and exports is
satisfying the need for variety,” it said.

U.S. agrees to expand low-tariff quota for Japanese beef imports

The United States has agreed to increase its low-tariff quota for Japanese beef in
bilateral trade negotiations, sources close to the matter have said.

While it is not known by how much the quota will be expanded from the current
200 tons per year, Japan will be able to export more beef to the United States at
a duty rate far below the 26.4 percent levied on quota-exceeding exports.
The United States levies an import duty of 4.4 cents per kilogram on the first 200
tons of Japanese beef each year. Japan exported 421 tons of beef worth ¥3.3
billion ($31 million) to the United States in 2018, showing fourfold growth in five
years. Before the United States withdrew from the Trans-Pacific Partnership free
trade pact in 2017, it had planned to set a 3,000-ton duty-free quota for Japanese
beef and remove the tariffs completely in 15 years.

Japan will abolish import tariffs on U.S. wine in seven years after a bilateral trade
deal takes effect, the sources said Sunday. Japan imposes a duty of 15 percent,
or ¥125 per liter, on U.S. wine. Under the TPP, Japan is eliminating import duties
on wine in eight years after the pact entered into force in December 2018. Tokyo
and Washington plan to finalize their trade deal when Prime Minister Shinzo Abe
and U.S. President Donald Trump meet in New York later this month. While the
details of a broad agreement reached in August on the bilateral trade accord are
yet to be announced, Japan is also expected to cut tariffs on U.S. farm products
such as beef, pork, wheat and dairy goods to around the same levels as in
existing free trade frameworks such as the TPP.

LINKS:

Alave, K.L (2011), Philippines bans Japan milk chocolates; global embargo
widens. https://newsinfo.inquirer.net/1489/ph-bans-japan-milk-chocolates-global-
embargo-widens
De Vera, B.O (2019), Philippines bans pork imports from 3 countries.
https://business.inquirer.net/279472/ph-bans-pork-imports-from-3-countries
Colcol, E. (2019), PHL essentially implementing import ban on vapes now —
Salceda. https://www.gmanetwork.com/news/news/nation/718510/phl-
essentially-implementing-import-ban-on-vapes-now-salceda/story/

Nelson, C. (2016), Philippines Central Bank Eases Foreign Exchange

Regulations. https://www.tradersbible.com/news/philippines-central-bank-eases-
foreign-exchange-regulations

France-Presse, A. (2019), Argentina imposes exchange controls to calm

markets. https://business.mb.com.ph/2019/09/02/argentina-imposes-exchange-
controls-to-calm-markets/

Business world (2016), Foreign exchange controls relaxed anew.

http://www.bworldonline.com/content.php?section=TopStory&title=foreign-
exchange-controls-relaxed-anew&id=131868

Placido, D. (2017), Philippines extends rice import quota for 3 years.

https://news.abs-cbn.com/business/05/22/17/philippines-extends-rice-import-
quota-for-3-years

Wang S. & Guo Y. (2020), China Won’t Raise Grain Import Quotas For U.S.,
Official Says. https://www.caixinglobal.com/2020-01-07/china-wont-raise-grain-
import-quotas-for-us-official-says-101501928.html

The Japan Times (2019), U.S. agrees to expand low-tariff quota for Japanese
beef imports: sources.https://www.japantimes.co.jp/news/2019/09/15/business/u-
s-agrees-expand-low-tariff-quota-japanese-beef-imports/#.XihrCFMzaRt