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17 June 2019

By PhilExport News and Features

Published also in Business Mirror

BEAUTY and personal care in Indonesia is expected to have a positive outlook albeit slower growth, with halal and natural mainly driving local purchases.

The Euromonitor Digest, the online publication of the Export Management Bureau of the Department of Trade and Industry (DTI), said many brands continue to issue halal certification.

“Reflecting on this, consumers are becoming increasingly aware of the halal-brand presence in Indonesia and are choosing to purchase these products. As a result, international brands that had not acquired halal certification at the end of the review period will begin to do so,” it said.

The report noted that consumers are expected to continue to purchase beauty and personal care, though increasingly looking for discounted products, indicating that many brands will be offering bundled packages.

“Retailers are also expected to boost their sales by adding a greater number of discounted products in their stores, as consumers’ buying habits are shifting, as evident in many drugstores such as Watsons or Guardian,” it added.

Within beauty and personal care, the Euromonitor Digest further said international brands compete directly with domestic brands. The report further underscored the increasingly important role of Internet retailing in the distribution of beauty and personal care. Many companies and brands increase their presence in the channel to boost sales, it said.

“Looking at this trend, Indonesian banks are also participating in the competition by offering discounts when consumers purchase using their credit/debit cards. Companies are expected to continue their promotional activities through establishing distribution in their online official stores on the e-commerce platform and on their own web sites,” it added.

The report said new product development in Indonesia revolves around new packaging.

“The new packaging in Indonesia is deemed necessary due to low purchasing power in 2017. Manufacturers tend to offer consumers a new image for their products to encourage sales during a low economic period,” it said. 

10 June 2019

Published also in Business Mirror

Representatives from 34 government agencies gather to finalize a memorandum of agreement (MOA) aimed at further improving the ease of doing business in the country and attract more investments by immediately acting and resolving issues encountered by investors.

THE Philippine Board of Investments (BOI), the country’s primary industry development and investments promotion agency (IPA), together with the 33 other members of the Investments Promotion Unit Network (IPUNet), has finalized the contents of a memorandum of agreement (MOA) seen to further improve the ease of doing business in the country and attract more investments by immediately acting and resolving issues encountered by investors.

At the IPUNet meeting conducted at the Great Eastern Hotel in Quezon City on May 24, 2019, 34 member-agencies committed to further collaborate and set the date of the MOA signing on July 10, 2019, with the heads of all the participating agencies expected to be on board for the ceremony.

The BOI, which serves as the IPUNet secretariat, through its Investment Assistance Service, presided over the review of the MOA and gathered the inputs and feedback of the participating government agencies. It was determined that the Anti-Red Tape Authority (Arta), as one of the new members of the network, will facilitate the issues not acted by concerned government agencies, as referred by the BOI-IAS.

“We have gained so much ground in our efforts to streamline our processes and procedures with the active participation of all stakeholders. As we finalized this, we look forward to the eventual signing of the MOA,” BOI-IAS Director Bobby G. Fondevilla said. The signing of the MOA is in accordance with Republic Act 11032 otherwise known  as the “Ease of Doing Business and Efficient Delivery of Government Services Act” and Republic Act 6713,“An Act Establishing a Code of Conduct and Ethical Standards for Public Officials and Employees, to Uphold the Time-Honored Principle of Public Office Being a Public Trust, Granting Incentives and Rewards for Exemplary Service, Enumerating Prohibited Acts and Transactions, and Providing Penalties for Violations Thereof and for Other Purposes.”

10 June 2019

Published also in Business Mirror

SEOUL—Trade Secretary Ramon M. Lopez highlighted the strong macroeconomic fundamentals, as well as the continuing growth story of the Philippines to South Korean business executives during a high-level roundtable meeting on June 4, 2019.

The trade chief emphasized the opportunities South Korean companies, particularly in the manufacturing industry, may explore when locating and expanding their operations in the country. Lopez underscored the wider market access for companies in the country through the preferential trade agreements the Philippines has with the United States (GSP), European Union (GSP+), as well as with the European Free Trade Association (Efta).

“The Philippines is an ideal geographic base for South Korean manufacturing companies, specifically those focusing on automotive and auto parts, electronics and semiconductors, food processing, agribusiness, and other labor-intensive industries. South Korea is a manufacturing powerhouse and expanding the business operations in the Philippines is a win-win, with businesses having greater market access for their products and being our partners,”  Lopez told over 30 South Korean business executives from construction and infrastructure, tool and die, as well as energy industries.

Likewise, the trade chief discussed possible opportunities in the Philippines’s e-vehicle (EV) industry. He cited the tariff modification of EV products under the ASEAN Free Trade Agreement as well the consideration of a target date full EV utilization/registration in the Philippines.

The International Electric Vehicle Association and other companies in the e-vehicle industry in South Korea, such as Hyundai Motor, POSCO E and C, and Phillips Group are encouraging the Philippines to provide additional support to attract more investors in the e-vehicle and parts industry, aside from the usual fiscal incentives. 

Tax incentives are not enough in developing an industry of the future. The association suggested to provide tax holidays and monetary support per unit produced, as well as government cost sharing in charging/battery replacement stations, the same package that are now being provided by the governments in South Korea and other Asean member-states. Accordingly, these countries have local programs to strengthen the industry to encourage the shift to e-vehicle, such as free registration and free parking for e-vehicles.

“This would have to be a special program similar to our CARS program, so it can quickly attract investors in the industry,” Lopez said.

Together with Department of Trade and Industry Undersecretary Ceferino S. Rodolfo, Lopez addressed the issues and clarified the concerns raised by existing locators on the Tax Reform for Attracting Better and Higher-Quality Opportunities (Trabaho) Bill, which rationalizes tax incentives to investments.

“The Trabaho Bill will offer modern and more relevant incentives,” Rodolfo said.  The trade chief also assured investors that there will be a good transition period of the new tax system and there’s no reason for them to delay their expansion projects in the country.

During the meeting, DTI Undersecretary Rafaelita Aldaba also presented the Philippine government’s inclusive, innovation-led, industrial strategy (i3s) as support for the socioeconomic agenda of President Duterte. The i3s complements the government’s thrust to promote an innovation ecosystem in the Philippines, with different sectors partnering to generate more jobs and improved business opportunities. This removes obstacles to growth, attracts investments, and creates jobs. It also sets up the environment to strengthen MSMEs and the domestic supply chains, encouraging their participation in global and regional value chains, and link manufacturing with agriculture and services.

The roundtable meeting was attended by Philippine Ambassador to the Republic of Korea Noe Albano Wong, BOI Director Angelica Cayas, and high-level business executives from 16 South Korean companies. Aside from POSCO, Hyundai, Phillips, also present were Lotte E&C, Seohee Construction Co., Korea Western Power, Daeil Corp, International Electric Vehicle Expo, Daekyung Eng. Co. Ltd., Korea Agricultural Machinery Industry Cooperative, Pyungtaek Port, and Korea Importer Association.

10 June 2019

Published also in Business Mirror

TOY traders looking to penetrate the mainland Chinese market need to understand which sorts of toys are now gaining popularity among children and their parents.

In a new survey, HKTDC Research found that traditional toys remain the most preferred toys overall in China. However other kinds of toys are also catching attention, propelled mainly by an emphasis on building children’s abilities and intelligence, such as the rise of “STEM” toys and new tech toys.

A number of STEM toys have been launched in recent years as China vigorously promotes STEM education, an educational approach that integrates the different subjects of Science, Technology, Engineering and Mathematics.

STEM toys require the child to assemble the parts or even do the programming themselves, which parents think can enhance the child’s ability. A physics toy kit with different sets of components is also looked on favorably, allowing the child to explore while following the instructions.

Also gaining ground are new-tech toys as manufacturers begin to incorporate new technologies into toys. The most popular are AI smart toys and virtual reality or VR toys.

Mainland parents are happy to spend on new-tech toys because these toys integrate learning and recreation and can enhance children’s knowledge, said the HKTDC report.

At the same time, while demand for electronic toys is waning, spin-offs of electronic games such as physical toys are still popular and reportedly have a huge potential in the Chinese market.

Meanwhile, among traditional toys, toy blocks are the most played with and regarded by many parents as a “must-have” toy. This is followed by dolls and jigsaw puzzles.

Boys of all ages display a marked preference for electronic/electric toys, said the report.

Younger children also tend to like musical instrument toys, dolls, and jigsaw puzzles while older ones prefer model toys, toy blocks, science experiment toy kits and so on.

As they grow older, boys show a stronger preference for toys which allow for hands-on exploration, favoring science experiment toy kits and various electronic games. Newtech toys have a greater appeal to older boys, followed by electronic/electric toys.

Dolls are the most popular toy for little girls. The survey indicated that girls across all age groups like make-believe toys, traditional inspirational toys, and do-it-yourself or DIY toys. New-tech toys that feature various functions such as artificial intelligence (AI) are also attractive, regarded as novelties that make good company for children.   

Meanwhile, the popularity of mobile games is on the wane following the mainland government’s repeated advice to parents against over exposing their children to electronic games.

10 June 2019

By Mary Fatima Barrameda | Market Innovation Division | DTI-Export Marketing Bureau

Published also in Business Mirror

INDONESIA is the largest economy in Southeast Asia and one of the emerging market economies of the world. With a population of 260 million, Indonesia is the fourth largest country in terms of population size. The country’s gross domestic product (GDP) expanded 5.17 percent in 2018, up from a growth rate of 5.07 percent in the preceding year.

In 2018 Indonesia was the ninth trading partner of the Philippines, 14th as export market and sixth as import supplier. Total bilateral trade was valued at $7.81 billion. Exports to Indonesia increased by 21.79 percent, from $724.21 million in 2017 to $881.99 million in 2018. 

The top 10 Philippine exports to Indonesia accounted for 52.53 percent of the total exports that include semiconductor devices, cathodes and sections of cathodes of refined copper, input or output units, tobacco, and polypropylene. Imports also increased by 9.05 percent, from $6.35 billion in 2017 to $6.93 billion in 2018. 

The top 10 Philippine imports from Indonesia comprised 61.38 percent of the total imports that include other coal, motorcycles, coffee-extract preparations and bituminous coal. This resulted in the Philippines’s having a trade deficit of $5.53 billion with Indonesia.

 To help address the widening trade deficit between the Philippines and Indonesia, the Indonesian government agreed to ease restrictions on the Philippines’s agricultural exports during the bilateral meeting in April 2019. The Government of Indonesia decided not to extend the imposition of dumping duty on Cavendish bananas originating from the Philippines and recognized the Davao region, Northern Mindanao, and Soccsksargen as pest-free areas for banana production.

Both parties also agreed to form a Technical Working Group to continue to discuss other issues including non-tariff measures affecting the two countries. They also agreed to conduct business missions alternately between Manila and Jakarta.

As Indonesia is a party to the Asean Free Trade Agreement, Philippine exporters can avail themselves of zero tariffs on most products when exporting to Indonesia.

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