27 May 2019

Published also in Business Mirror

The staunch supporters and movers of the Philippine gifts, décors and houseware sector are shown during the MA’I Lifestyle relaunch at the 69th Manila FAME. Present are: DTI Export Marketing Bureau (EMB) Assistant Director Anthony Rivera, DTI-EMB Director Senen Perlada, Philippine Federation of Furnishings Associations (PhilFFA) Secretary-General Chiqui Veneracion, HAPI President Leah Reyes, ANP President Christina Gaston, PhilHHDA President Romeo Balderrama Jr., PCHEAI President Milagros Lacson, Foreign Buyers Association of the Philippines (FOBAP) President Robert Young, BOI OIC-Director Fe del Rosario, DTI-Citem Executive Director Pauline Suaco-Juan, Philippine Exporters’ Confederation Inc. (Philexport) President Sergio Ortiz-Luis and Philexport Vice President Leonor Abella.

INITIATIVES to further boost the country’s gifts, décor and houseware are finally paying off as the Philippines continues to carve a niche in the international market as the preferred source of globally competitive, innovative and quality GDH products. Twenty-eighteen trade statistics showed that while country’s total export sales went down, the GDH sector’s growth continue to shoot up with a 23.9-percent increase in exports from $166.54 million in December 2017 to $206.34 million in December 2018.

The continuous growth of the country’s GDH sector is largely boosted by the collaborative efforts of the government and private sector stakeholders to further push the competitiveness of the industry through various initiatives such as industry policy interventions, product development, strengthening the supply chain and promotion activities.

A key promotion initiative was the relaunch of MA’I Lifestyle, the sector’s official brand, during the recently concluded 69th Manila FAME at the World Trade Center in Manila.

Conducted through the cooperation of five business support organizations (BSOs), namely the Association of Negros Producers, Home Accents of the Philippines Inc., Mindanao Trade Exposition Foundation, Philippine Chamber of Handicraft Exporters and Artisans Inc. and the Philippine Lifestyle, Homestyle and Holiday Décor Association, the relaunch was a strategic move to spark brand recall for MA’I Lifestyle and further promote the Philippines as a primary source of reliable GDH products.

Upcoming initiatives to uphold MA’I Lifestyle were announced during the activity, including possible partnerships with the Department of Trade and Industry Center for International Trade Expositions and Missions (DTI-Citem) and Export Marketing Bureau (EMB) in tapping into new markets abroad by conducting missions and joining trade expositions. Likewise, seminars will be organized to help MA’I Lifestyle member-companies comply with international buying standards. Select MA’I products were also showcased at the Design Commune, one of Manila FAME’s special show features.

The Philippine Board of Investments (BOI), the country’s lead industry development and investments promotion arm, played a vital role in the conception of the MA’I branding for the Philippine GDH sector with the development of the GDH road map. During the road map’s launch at the BOI’s Trade and Industry Development (TID) Updates forum back in July 2016, the need for the GDH companies to focus in building their corporate branding was raised.

The BOI, along with BSOs and concerned stakeholders worked together to build a unified brand for the Philippine GDH sector, which includes the creation of brand name, logo, tagline, and visuals that will be used for the GDH sector’s web site, catalogue, and participation to international exhibitions.

MA’I was first unveiled to the public during the 66th Manila FAME in October 2016, following the conduct of nationwide branding workshops and consultation sessions spearheaded by the BOI and the GDH BSOs.

For this year, the BOI will continue supporting the sector through partnerships with relevant agencies in identifying training opportunities that can further capacitate the industry.

By PhilExport News and Features

20 May 2019

Published also in Business Mirror

THE Department of Trade and Industry (DTI) aims to conduct a learning session on Philippine Quality Award (PQA) program for local exporters that intends to help them achieve world-class performance.

Already, 81 organizations in the private and public sectors which excel in quality and productivity were conferred the PQA over the past 10 years.

“It is not an award for product or service quality, but for a quality management system that hinges on improvement in the delivery of products and/or services, and provides a way of satisfying and responding to customers’ needs and requirements,” said a briefing paper on PQA program released by the DTI-Competitiveness Bureau.

PQA provides an internationally comparable framework and criteria, patterned from the Baldrige Performance Excellence Program of the United States, for assessing organizational performance.

The highest level of national recognition for exemplary organizational performance, the program is a template for competitiveness based on the principles of Total Quality Management.

Competitive organizations are believed to possess 11 core values of the PQA program, including managing for innovation, focus on success, organizational learning and agility, management by fact, societal responsibility, ethics and transparency, delivering value and results, systems perspective, visionary leadership, customer-focused excellence and valuing people.

“Innovation and continuous improvement are different, but complementary, concepts. Successful organizations use both approaches to improve performance,” the briefing paper said.

It said they should also ensure their success “now and in the future” through understanding of the short- and longer-term factors that affect the organization and its market.

“Ensuring this ongoing success requires managing uncertainty in the environment, as well as balancing some stakeholders’ short-term demands with the organization’s and stakeholders’ needs to invest in long-term success,” it added.

These core values are embedded to the first six process criteria categories, which are leadership; strategy; customer; measurement, analysis and knowledge management; work force; and operations.

The highest level or the top award is the Philippine Quality Award for Performance Excellence.

“To win the top award, the organization must demonstrate the highest level of management excellence, deserving to be a national and global role model,” it said.

The PQA or recognition is given by no less than the President of the Philippines in appropriate ceremonies usually held at the Malacañang.

20 May 2019

Published also in Business Mirror

PHILIPPINE exporters may soon find it easier to export under the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA) agreement as the ASEAN and Australia-New Zealand are planning a pilot program allowing the use of a declaration of origin (DOO) as evidence that the imported goods meet the rules of origin (ROO) and are eligible for preferential tariff treatment.

Under the proposed DOO pilot, origin certification under AANZFTA can be provided by either the DOO or the existing certificate of origin (COO), it was disclosed at a recent workshop in Pasig City.

Thus, the pilot will make documentation of origin a dual system, with traders having the option to use either the COO or DOO.

A DOO is a statement the goods are originating goods that meet AANZFTA requirements. It is a self-certified document made by the manufacturer, producer, supplier, exporter or other competent person on a DOO form, a commercial invoice or other commercial documents.

A COO is a form identifying goods and containing a certification by an authorized body that the goods are originating goods and meet AANZFTA requirements. Unlike the self-certified DOO, the COO is issued and certified by an authorized body on the basis of an application and declaration by the exporter or manufacturer.

Both DOO and COO can serve as proof that the imported goods are originating in accordance with AANZFTA’s requirements and are thus eligible for preferential duty rates.

Under the pilot, the importer will be required to possess either a COO or DOO when claiming preferential treatment on the import declaration.

The DOO scheme is seen to provide a number of benefits for exporters who will avail themselves of AANZFTA preferential duties. With DOO self-certification, traders are equipped with a cost-effective measure to facilitate exports, while still providing adequate documentary evidence of origin.

DOO advantages include placing the documentary evidence requirements on traders; facilitating responsiveness to modern supply-chain patterns; and speeding up the flow of trade because the exporter can export whenever he wants, not having to wait for the authorized issuing body to issue the COO.

There is also a cost benefit to traders because a trader-issued DOO costs nothing, while an authorized issuing body may charge fees. The exporter also saves on transport time and fees as he no longer has to go and lodge and pick up a COO. The DOO can be issued by the trader anytime, including weekends and midnight.

Further, the DOO is simple to use as all that is required is a declaration that the goods meet the required ROO to be placed in the sales invoice (or similar document).

Therefore, no new paperwork is required by the trader.

The use of DOO will not be mandatory. Exporters can choose to use either the DOO or COO depending on their level of ROO knowledge.

For those who will opt to use the DOO, they are advised to ensure the DOO is accurately completed to avoid delays.

AANZFTA parties are currently holding awareness workshops giving an overview of the DOO pilot program in preparation for its launch.

20 May 2019

Published also in Business Mirror

THE International Chamber of Commerce (ICC) is preparing for the publication of Incoterms 2020, an update of the renowned regulations that define the responsibilities of buyers and sellers operating in the international trade system.

Facilitating trillions of dollars in global trade each year, the “international commercial terms,” or Incoterms rules, are a commonly accepted set of definitions and rules governing commercial trade activity.

Following a series of studies conducted in the 1920s, ICC discovered discrepancies in the interpretation of commercial trade terms used by traders from different countries. Based on these findings, ICC concluded there was a need for the creation of a common protocol for importers and exporters everywhere.

The first set of Incoterms rules was published by ICC in 1936. Since then, ICC has periodically revised the Incoterms rules to reflect changes in the international trade system. Incoterms 2010 is the most current version of the rules to date. This latest edition of the Incoterms rules included an increased obligation for buyer and seller to cooperate on information sharing and changes to accommodate “string sales.”

For the past decade, Incoterms 2010 has provided critical guidance to importers, exporters, lawyers, transporters and insurers across the world. In its centenary year, ICC is preparing for the official release of Incoterms 2020 later this year. Today, more than ever, participants in the global trade system require guidance and clarity. With the emergence of new technologies, government policies and environment regulations, Incoterms 2020 will provide a common framework for the future of trade. The development of Incoterms 2020 saw extensive consultation among economists, lawyers and trade experts, as well as insight from ICC’s global network of national committees.

The participating national committees, as well as ICC’s Knowledge Solutions Department, have provided substantial contributions to the new Incoterms rules. The final draft, to receive approval by the ICC Executive Board, will be published in 2020. The Incoterms 2020 Drafting Group formed by ICC in 2016 consists of nine experts from around the world, including ICC’s Trade and Investment directors: three from Asia, two from America and four from Europe. In terms of expertise, the Drafting Group features four users of Incoterms rules and five commercial lawyers, who are specialists in international trade.

Since 2016, the Drafting Group has met at length to analyze, discuss and consider more than 3,000 substantial comments provided by ICC national committees. Successive consultations took place with participation from ICC national committees in April 2017, October 2017 and May 2018. This process also included two “user” global consultations, which took place in Beijing (2017) and London (2018). During the drafting process, the international editorial board met 12 times between July 2016 and September 2018 to discuss proposed changes, as well as recommendations from ICC national committees.  

By PhilExport news and Features

20 May 2019

Published also in Business Mirror

SWEDISH companies are keen on investing in the Philippine market, particularly in sectors that are picking up here, apart from infrastructure.

A report titled “Philippines-Open for Business” published by Business Sweden identified these sectors as manufacturing, retail and e-commerce, and information technology-business process management (IT-BPM).

“The manufacturing sector is expected to grow steadily in the coming years. It will be a priority investment area for both the public and private sector, given that it has higher employment, income and output multipliers compared to other industries,” it said.

The report underscored the need for enhanced productivity in order for the country to make a significant leap forward in becoming a strong regional player in manufacturing.

“For Swedish companies, this represents a unique and almost untapped opportunity to educate the market in automation and lean manufacturing,” it said.

They also considered the IT-BPM industry in the Philippines now a key contributor to socioeconomic development, with revenues reaching roughly $25 million in 2017, translating to over 9-percent contribution to GDP.

“In the medium term, we see that industry dynamics will be driven by rapid technological advancements, such as automation, artificial intelligence, digital transformation and the use of big data and analytics. In our view, higher value jobs, which are present in non-voice services, would grow faster compared to the traditional voice subsegment,” it added.

The report noted the growth in the retail sector as a result of the bullish economy has been coupled with an increase in e-commerce.

It cited Google and Temasek reports indicating e-commerce is set to be the largest segment of the online economy in Southeast Asia by 2025, valued at a total of  $88.1 billion.

“The Philippines’s slice of the e-commerce cake is expected to be $10 billion. As in many of the Southeast Asian countries, the younger generation is driving the e-commerce wave and Filipinos are particularly eager to embrace the shift to online shopping,” it added.

On opportunities in infrastructure, Swedish suppliers that can offer equipment, solutions and services for critical applications will be able to “find a good, profitable and high growth market for years to come in the Philippines.”

“Private sector-led projects provide larger and more opportunities, as companies that are proponents to PPP [public-private partnership] projects prioritize quality and the actual business case in procurement. Swedish companies are well suited because of their high innovation level,” the report further said.

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