The Economic Development Cluster, in its meeting last 14 June 2018, strongly supported and endorsed the Philippine Export Development Plan (PEDP) 2018-2022 for approval of President Rodrigo Roa Duterte.

Trade and Industry Secretary Ramon M. Lopez, Chair of the Export Development Council (EDC) eyes the approval of the PEDP 2018-2022 soon.

The PEDP 2018-2022 is a five-year roadmap that identifies three strategies and action plans to reach the country’s export targets of US$ 122 Billion in 2022.

The first strategy dwells on the government’s goal of improving the overall climate for export development through removal of unnecessary regulatory impediments, enhancement of trade facilitation, improved access to trade finance and export competitiveness.

The second strategy will exploit existing and prospective opportunities from trading arrangements. DTI has programs that aim to increase awareness on various opportunities offered by free trade agreements that the Philippines currently enjoys. In the new PEDP, the strategy proposed a dedicated program like DTI’s Doing Business in Free Trade Areas (DBFTA) to strengthen promotion efforts to prospective and existing exporters.

Lastly, the plan proposes the crafting of comprehensive packages to promote select products and services for export.

The PHILEXPORT-Cebu Chapter can now endorse applications of its members for travel tax exemption.   The Technical Working Group on EO 589 Exempting Exporters for Travel Tax Exemption (TTE) recently approved the request of PHILEXPORT-National for the additional signatories from PHILEXPORT- Cebu. This is to facilitate the release of TTE certificate by the Tourism Infrastructure and Enterprise Zone Authority (TIEZA). PHILEXPORT-Cebu may now endorse TTE applications directly to the Export Development Council which monitors and oversees the implementation of the Executive Order.

Under EO 589, exporters who will travel abroad to participate in international trade fairs  and exhibitions are entitled to TTE.

Exporters in Cebu may contact PHILEXPORT-Cebu at telephone numbers (032)254.4333/ 254.9266/254.433 or email at info@philexportcebu.org

President Rodrigo Duterte has signed into law the Ease of Doing Business (EODB) and Efficient Government Service Delivery (EGSD) Act of 2018. The new law will shorten the number of days in processing permits and licenses of all business-related transactions in the Philippines.

Signed on May 28, Republic Act (RA) No. 11032 also includes stricter rules like the two-strike policy that any violation will warrant penalties and liabilities for government officials who fail to issue permits in the given period.

The provisions of the law were highlighted in the 6th Annual Ease of Doing Business Summit recently held at the Philippine International Convention Center in Pasay City.

RA 11032 amends Republic Act No. 9485, otherwise known as the Anti-Red Tape Act of 2007.

Under this Act, businesses can expect streamlined processes; reduced processing times from all government agencies, including government-owned and controlled corporations (GOCCs). Government agencies shall be made to comply with the prescribed processing time: three working days for simple transactions, seven working days for complex transactions, and 20 working days for highly technical transactions.

Apart from streamlining, the law also provides for the creation of a central business portal that will receive and capture application data on business-related transactions, while a Philippine business databank will provide LGUs and national government agencies access to information to verify the validity and existence of businesses. With this, businesses are not required to submit the same documentary requirement previously submitted

It is therefore necessary for regulatory agencies to undertake the RIA process which involves problem definition, setting the objectives, identifying options (from doing nothing or status quo to other options), impact analysis (cost-benefit analysis), comparing options, and implementation and monitoring.

World Bank strongly suggests that regulatory agencies must subject any proposed regulation to the regulatory impact assessment (RIA), a tool that ensures the quality of regulations through a rigorous, well-defined and evidence-based analysis.

RIA is a process and a document to “clean” the rules particularly those involving high regulatory risks that reduce investment and competition; high transaction costs due to a complex, multi-layered, often arbitrary rules that are vulnerable to corruption; too little market regulation, poor enforcement, and under-institutionalization in policy areas as consumer and environmental protection; and checks and balances, such as  an effective judiciary which are weak, harming new entrants.

In a recent training on RIA, World Bank emphasizes that a good regulation should be  focused on policy problem,  introduced when necessary and proportionate to the risk posed by the policy problem, accountable  to those affected by  the regulation and those who confer regulatory authority, transparent  or consultation based, and consistent,  taking into account existing rules and regulations.

Corollary to this, the Office of the President issued Memorandum No. 27, series of 2017 which, directs among others, the NEDA to promote among regulatory agencies the use of RIA and other related tools.  In Turn, NEDA now implements the Program on Modernizing Government Regulations (MGR) in cooperation with the Development Academy of the Philippines.

The Philippine Ports Authority (PPA) issued Memorandum Circular (MC) No. 07-2018 that approves the 7% increase of cargo handling tariff for international containerized and non-containerized cargoes at the two international terminals in Manila. The new rate takes effect on June 5, 2018.

PPA’s approved rate is lower than the 8.7% hike requested by the terminal operators, Asian Terminals, Inc. (ATI), which operates the Manila South Harbor, and the International Container Terminal Services, Inc. (ICTSI), which operates at the Manila International Container Terminal (MICT).

Under their contracts with PPA, both terminal operators may file for a rate hike every two years. The last cargo-handling tariff rate adjustment was in 2015, when PPA granted an 8% rate increase. Their petitions are in keeping with PPA Administrative Order 02-2018 which prescribes the revised methodology and formula for adjustment of Cargo Handling Tariff.

Prior to the approval of the rate adjustment, the Export Development Council (EDC) expressed its opposition to the original 8.72% request using the Consumer Price Index (All Items) National Capital Region. The CPI (All items) Philippines shall be the factor of adjustment as provided in Section 7 of PPA AO 02-2018. If applied, the rate hike should have been 6.52%.

Hence, for loaded Container Yard/Full Container Load is charged at US$ 105.457 for 20 ft container and US$ 147.517 for 40 ft. container. Empty Container is charged at US$ 88.646 for 20ft and US$ 114.203 for 40ft. Schedule of Cargo Handling Tariff at Manila International Container Terminal and South Harbor can be downloaded at PPA website at  www.ppa.com.ph

Government efforts for the development and promotion of Philippine Halal Industry are underway to tap the rising demand on Halal products and services. The halal food industry is estimated to reach 3 trillion in 2021 that can be tapped by the Philippines.

This trend provides strong but challenging opportunities for the Philippines. In 2017, the Philippines only captured P5.52 billion on revenues from halal products or 8.73% of the country’s total exports valued at P63.23 billion.

To seize the opportunities on halal markets, the Philippine Halal Export Development and Promotion Board is working vigorously on the development of Philippine Halal industry.

The Halal Board, composed of several government agencies such as the Departments of Trade, Agriculture, Foreign Affairs, Tourism, Health, Science and Technology, is tasked by Republic Act 10817 or the Philippine Halal Export Development and Promotion Act of 2016, to “formulate, advocate, coordinate, oversee and assess the implementation of the Philippine Halal Export Development and Promotion Program”.

Recently, the Halal Board launched the Philippine National Halal Certification Scheme and the Accreditation Guidelines at the 1^st Philippine National Halal Conference in Davao City. The National Halal Certification scheme will serve as guiding principles in accrediting halal certifiers and enable Philippine products to be accepted as halal players in global halal ecosystem.

For its part, the Department of Agriculture formulated standards for slaughtering that must be followed by halal producers. These are standards for Feeds, Agriculture and Fishery Products, Slaughtering Practice for Ruminants and Slaughtering Practice for Poultry. An accepted standard across the whole halal value chain must be in place to meet the requirements of halal markets.

“Awareness campaign is also being done to encourage exporters to improve their products to be competitive and penetrate the global Halal market”, Halal Board Chair and Trade Secretary Ramon Lopez said during the Halal Conference. He also enjoined the academe to include halal in its curriculum and promote research and development on halal to comply with international requirements.

Halal industry can be developed beyond food particularly in tourism, pharmaceutical, travel, modest fashion and cosmetics.

Exporters who are shipping out their goods through the Ninoy Aquino International Airport (NAIA) lauded the Bureau of Customs – NAIA decision to discontinue the reprocessing or recording of shipments approved at the One-Stop Export Documentation Center (OSEDC). A memorandum order shall be issued by the BOC – NAIA to this effect.

In February 2018, the Export Division of NAIA issued a directive that “all shipments processed at OSEDC must be re-processed at the Bureau of Customs Export Division’s Documentation Unit”.

In a meeting among the BOC-NAIA, Export Development Council (EDC) and Philippine Exporters Confederation, Inc. (PHILEXPORT), NAIA District Collector Carmelita Talusan clarified that the directive was aimed to record, monitor and collect data of all shipments that are coming out of NAIA, not to reprocess such shipments.

To serve the BOC purpose, OSEDC will send the summary of shipments approved by the OSEDC to BOC-NAIA on a daily basis.

Collector Talusan also bid to work on facilitating trade as one of the thrusts of the BOC, aside from revenue generation and border security. The BOC-NAIA is also working on the implementation of the electronic-to-mobile (e2m) system to further streamline the processes for NAIA shipments. The private sector is encouraged by the BOC-NAIA to be a partner in such endeavor. – Asnia R. Bayabao

“The Department of Labor and Employment (DOLE) shall implement Philippine labor policies to all businesses including MSMEs”, said Assistant Secretary Alex Avila at the 2nd Quarter General Membership Meeting of the PHILEXPORT. He informed that the agency is now looking into a “soft approach” to the “endo” by conducting constructive engagement with social partners on the voluntary regularization plan of companies. More importantly, DOLE will look into the developmental approach to existing labor inspection policy in the country. He assured that companies need not worry during inspections as the DOLE is willing to teach them the proper way to comply with the labor policies.

DOLE’s “soft approach” to the “endo” regime can be seen on how the agency had dealt with Jolibee. DOLE considered that the thousands of employees in Jolibee were actually lawful contractual workers and ordered their regularization. Jolibee has opted to the voluntary regularization plan.

DOLE Department Order Nos. 174 and 183, s. 2017 prohibit labor-only contracting, regulate lawful contractual arrangements, and include workers in the inspection of compliance with labor standards and laws. This move will ensure that there will be no “555” which refers to the practice of firing contractual employees after five months. It will also eliminate the practice of “cabo” or persons/entities that, under the guise of labor organization, cooperative or any entity, supply workers to employers and contracting out of job or work through an in-house agency, etc. As such, this will put an end to all illegal forms of contractualization and other forms of illegal labor practices.

On the other hand, employers expect an increase in the cost of labor amid the government’s move to regularize more workers. Thus, absorbing and regularizing the employees would come at a cost to enterprises. However, it will be offset by better productivity by the workers. – Grace T. Mirasol

The Export Development Council (EDC), in its meeting last 09 March 2018 approved the Philippine Export Development Plan (PEDP) 2018-2022 through Resolution No. 02, s. 2018 endorsing the PEDP 2018-2022 for the President’s approval.

As part of the process, the PEDP 2018-2022 will be submitted to the Office of the President through the Cabinet Economic Development Cluster.

Sec. 5 of Republic Act No. 7844 or the Export Development Act (EDA) provides that the President of the Republic of the Philippines shall approve the PEDP prepared by the Department of Trade and Industry (DTI) which shall form part of the Medium-Term Philippine Development Plan, now called the Philippine Development Plan (PDP).

The PEDP 2018-2022 embodies the country’s export thrusts, strategies, programs and projects which are aligned with the PDP 2017-2022 and the 10-point socio economic agenda of the President for enhanced competitiveness and support to SMEs. It shall be jointly implemented by the government and export stakeholders. The Plan aims to increase exports to $122B-$130B in 2022.

Data and analyses in the said Plan were gathered from the EDC Visioning and Strategic Planning and a series of focused group discussions with stakeholders from the government and export sectors in NCR, Cebu City and Davao City in 2017.

This is pursuant to Department Order No. 11-2018 issued by the Department of Finance last 9 February 2018 which states that the “authority to accredit and register customs brokers and importers is reverted solely to the Bureau of Customs for purposes of simplification of process”.

The BOC also posted in its website the application forms for the accreditation. Said forms indicated that the applicant must also submit a list of Importable items with clear description in technical and tariff terms, estimated volumes and values for the next twelve (12) months.

Following the issuance of DO 11-2018, the BOC is now mandated to provide the BIR with a list of accredited importers and customs brokers for post-accreditation validation of tax compliance. In turn, the BIR shall notify immediately the BOC if there is a case of tax deficiency and non-compliance of accredited importers and customs brokers.

DO 11-2018 repealed DO 12-2014 and DO 18-2014 which required two-step accreditation process. Previous process requires importers and brokers to go through stringent verification procedure of BIR to secure Importers Clearance Certificate (ICC) and Brokers Clearance Certificate (BCC) respectively and submit the same as form part of the requirement of BOC accreditation.Since March 1, the Bureau of Internal Revenue has stopped accepting application for accreditation.