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DOLE to soften implementation of “ENDO” labor policies to MSMEs

“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

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EDC approves PEDP 2018-2022; endorses to the President

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.

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BOC issues requirements for importers, brokers accreditation

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.

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Travel Tax Exemption Certificate now in new TIEZA office

Exporters are advised to claim their travel tax exemption certificates from the new office address of the Tourism Infrastructure and Enterprise Zone Authority (TIEZA) at the 6th floor, Tower 1 Double Dragon, Meridian Tower Diosdado Macapagal Avenue cor. EDSA Extension, Pasay City.

For more inquiries and concerns please email traveltax@tieza.gov.ph or call telephone numbers 257-8136/ 463-9857/ 551-3945.

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Philippines loses $2B- $5B annually due to international shipping surcharges

Destination fees and surcharges imposed by international shipping lines cost the Philippine economy an estimated US$2 billion to $5 billion in losses annually, according to the joint report by the Export Development Council (EDC) and National Competitiveness Council (NCC).

This report entitled “Potentially Avoidable International Shipping Cost and Other Charges” was initiated by Dr. Enrico Basilio, Chair of the joint Committees on Transport and Logistics of EDC and NCC, and Mr. Michael Raeuber, CEO of Royal Cargo Group of Companies and former President of the European Chamber of Commerce in the Philippines (ECCP).

Highlights of the report were presented during the public hearing conducted by the House Committee on Transportation (COTr) last 17 January 2018 that tackled the Container Deposits and Related Charges imposed and collected by Agents of International Shipping Lines.

The document, based on a series of forums and a survey conducted last year, disclosed that for imports, freight accounts for an average of only 39% of the total amount paid to international shipping lines, while the so-called “destination charges” levied on Philippine importers by the carriers account for 61%.

For exports, freight costs accounts for an average of 25% of the total amount paid to international shipping lines (Carriers) while the so-called “origin charges” levied to Philippine exporters by the Carriers account for 75%.

The report said such costs undermine the country’s export competitiveness by increasing the cost of importing raw materials and intermediate goods. It noted that the hardest hit by these costs are the small exporters and importers (SMEs) because larger and regular importers and exporters are able to negotiate for better rates and terms with international shipping lines.

The report also undermines the competitiveness of domestic producers by increasing the cost of imported raw materials and intermediate products. Surcharges are also seen to make domestic consumers pay higher prices for imported products (for final consumption) since the “added” import cost is passed on to them.

COTr Chairman and Catanduanes representative Cesar Sarmiento said that with these claims and result of the report, the next hearing will be a joint meeting with the House Committee on Economic Affairs to find the best solution for the situation.

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Exporters urged to comment on proposed technical barriers to trade

Exporters are encouraged by the Bureau of Philippine Standard (BPS) of the Department of Trade and Industry to comment on the proposed technical regulations of different countries on 151 products. The list is released by the World Trade Organization (WTO) through the WTO-TBT Enquiry Point at the BPS Standards and Conformance Portal (www.bps.dti.gov.ph). Said regulations cover Domestic and Commercial Equipment, Entertainment, Sports, Electrical Engineering, Fluid Systems and Components for General Use, Food and Beverages, Health Care Technology etc. to be exported to Brazil, Egypt, the European Union, Rwanda, the United States of America and other countries.

For more information, DTI-BPS may be reached at its email:  bps@dti.gov.ph and tel. no. (632) 751.4700.

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BIR-ICC repealed

The Bureau of Internal Revenue Import Clearance Certificate (BIR-ICC) has been repealed by Department Order No. 11-2018 of the Department of Finance.

Importers and customs brokers  accreditation will now be processed solely by the Bureau of Customs (BOC) to simplify the process.

DOF Secretary Carlos Dominguez, who signed the Order last 7 February 2018, noted that the move is pursuant to Section 1200 of Republic Act 10863 or the Customs Modernization and Tariff Act (CMTA).

Instead, the BOC shall provide the BIR with a list of accredited importers and customs brokers for post-accreditation validation of tax compliance. On the other hand, the BIR shall notify immediately the BOC if there is a case of tax deficiency and non-compliance of accredited importers and customs brokers.

To implement this Order, the BOC and BIR are tasked to issue relevant orders and administrative issuances.

The Export Development Council welcomes this policy decision as it had recommended the removal of BIR-ICC which required many documents and caused delays in the accreditation of importers and brokers. This initiative is seen as putting in action one of the 10-Point Socioeconomic Agenda of President Rodrigo Duterte which includes enhancing competitiveness and promoting ease of doing business.

Download Department Order NO. 011-2018

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Innovation expert: Know your customers to produce value-added exports

“Know your customers better to deliver value-added export products. People today are looking for outcomes and experiences much more than products and services”. This is the main statement of Professor Paris de l’Etraz, Chairman of Applied Innovation Institute during his speech in the recent National Export Congress 2017.

He further said that “Innovative compa-nies are not dealing with products. Most of them are dealing with creating relation-ships, engaging and delivering experien-ces to their custom-ers”,

Professor de l’Etraz emphasized that 90% of all successful ideas today are improvements of something that already exists. He added that decision making needs to move from gut feel and instinct to data-driven decisions.

The speaker included the following advice on exports:

1. Move from commodities to “value-added” products, the companies that are exporting the most have done this well.

2. Customers today are moving from buying products to buying experiences and outcomes

3. Think globally as a “Firm” and as a “Country”, and take your story abroad.

4. Train your people to deliver value-added work.

5. Collaborate with your peers to make “Grown in the Philippines” or “Made in the The Philippines” a value-added reference.  –Piercy Kieth Cezar

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Government to expedite accession to Istanbul Convention for ATA Carnet

Relevant government agencies have concurred to the urgency of the Philippine accession to the Istanbul Convention which will implement the ATA Carnet System.

The ATA Carnet is an international scheme that will allow tax-free and duty-free importation of commercial samples, professional equipment and articles for presentation or use in trade fairs, shows, exhibitions without customs formalities. It will also allow traders to use Carnet, a single document of goods that will pass through several customs territories and will be valid up to one (1) year. Hence, traders will save costs and time in clearing goods at the border.

Relevant agencies such as the Department of Trade and Industry (DTI) and Department of Finance (DOF) are urged to submit their respective Certificates of Concurrence (COC) to the Department of Foreign Affairs (DFA) by December 2017.

The DFA – United Nations and International Organizations (UNIO) leads in the preparation of the Instrument of Accession for the President’s approval. Director Roberto Manalo of the DFA-UNIO who serves as the chair of the technical working group on ATA Carnet, underscored the need for government agencies to support the promotion of export development through the ATA Carnet system.

He added that this is also in compliance to the Office of the President Memorandum Circular No. 27 issued last 6 October 2017 which directs government agencies to “strengthen the implementation of the Philippine Export Development Plan (PEDP).” –Asnia R. Bayabao

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Sigasig Caravan urges government, Educators & Industry to collaborate

The first regional education caravan to roll out the Strengthening of Industry-Government-Academe Linkage For Inclusive Growth (SIGASIG), was recently conducted in Iloilo City covering Regions 6,7 and 8.

SIGASIG caravan aims to sustain the linkage between the academe and the industries all over the country to better equip graduates with skills required by the industry. Skills matching and talent upgrading strategies to fill the gaps were discussed.  In collaboration with government and industry; curriculum should be upgraded and faculty immersion shall be pursued in industry.

The Philippine Chamber of Commerce and Industry, the Export Development Council and the Pampanga Chamber of Commerce conducted this caravan with the Iloilo Chamber of Commerce and the PHINMA University of Iloilo, as a concrete support to the Philippine Development Plan 2017-2022 which targets an improved global competitiveness and inclusive growth through better quality education.- Grace T. Mirasol