Fellow members of the National Security Council’s Strategic Trade Management Committee (NSC-STMC), other colleagues from the Philippine government, partners from the United States Defense Threat Reduction Agency (US DTRA), Black and Veatch, Endec Inc., SpinTEK, distinguished guests—a pleasant morning to all.

Welcome to the official launch of the Strategic Trade Management Office or STMO e- Licensing Platform.

This e-Platform launching is a milestone since the Strategic Trade Management Act was enacted in 2015. It is a testament to the Philippines’ continuing commitment to its international obligations in pursuing peace, particularly the United Nations Security Council Resolution 1540.

The late American President Ronald Reagan said, “Peace is not the absence of conflict; it is the ability to handle conflict by peaceful means.”

Security Council Resolution 1540 seeks to address the most critical challenges to peace and security the world faces today: preventing the proliferation of weapons of mass destruction (WMD); controlling the spread of conventional arms; and regulating transfers of goods, software, and technologies that can be used for WMD or military purposes.

Confronting these challenges effectively is critical to protecting our country’s national security, foreign policy, international commitments, and most importantly, our people, our environment, and our allies.

WMDs are weapons that can cause widespread damage to human and animal life, infrastructure, and the environment; they also evoke terror in a population. They can be nuclear and radiological, biological, or chemical.

Tools are double-edged. Many items that can be used to develop WMDs and conventional arms and enhance military programs have peaceful applications. These dual-use items are goods, software, and technologies typically used for commercial purposes but can also be used as WMDs.

This is how we’ve come to this point in managing conflict through peaceful means. The international community responded to WMDs and arms proliferation challenges by managing and controlling trade in military and dual-use items called strategic goods.

For its part, the Philippines created our National Security Council’s Strategic Trade Management Committee (NSC-STMC) as the central authority on any and all matters relating to strategic trade management. This body is headed by the Executive Secretary as its chairperson and the Trade and Industry Secretary—yours truly—as its vice- chairperson. Its pivotal role necessitates the membership of the Secretaries of Foreign Affairs, Justice, Environment and Natural Resources, Interior and Local Government, Finance, Transportation, Information and Communications Technology, Science and Technology, National Defense, Agriculture, Health, and the National Security Council.

Through the Strategic Trade Management Office or STMO, the Philippine government works to harmonize our strategic trade rules with our partners and allies. The STMO is a bureau created under the administrative supervision of the Department of Trade and Industry or DTI. The office serves as the executive and technical agency in establishing the management system for the trade in strategic goods. Aside from verifying compliance with the law, it also supervises the implementation of the trade licensing system.

Today’s launch of the STMO e-Licensing Platform is a significant stage in monitoring and controlling trade in the specified strategic goods. We aim to balance facilitating legitimate trade and maintaining international peace and security, and we want to trade in tools while ensuring that these tools are not used as weapons. The STMO e-Licensing Platform is a way forward in responsibly managing strategic goods and providing related services.

STMO’s success is measurable and recognized. In the relatively short time since STMO was established in 2017, the Philippines improved its ranking on the Peddling Peril Index from 86th to 49th place in 2021/2022. The Peddling Peril Index is the first comprehensive and in-depth ranking of the effectiveness of strategic export controls by country. In this marker, our country was also considered the most improved country for the same period. Moreover, we continue to gain the trust of our stakeholders with a 100% satisfaction rating in 2022.

In July 2020, when STMO started implementing and accepting export authorization applications up to the end of that year, the export value for strategic goods amounted to USD 3.6 million. The following year, 2021, there was a big jump when traded strategic goods were valued at USD 4.5 billion. The STMO has yet to verify the specific amount for last year, 2022, but it is estimated to be around the same USD 4.5 billion figure. The STMO is still validating the annual reports and reconciling the data with the Bureau of Customs.

In 2021, information systems formed 98% of these exports, while semiconductors and integrated circuits accounted for the remaining 2%. Also, there were USD 650,000 in new investments in the intangible technology transfer.

Our biggest trading partner is the United States at 60%. Next is Japan at 21%, Singapore at 5%, South Korea at 4%, and China at 3%.

The potential trade in strategic goods is expected to increase as businesses become more confident to expand their activities, considering the risk assessment criteria we apply to all export applications. For instance, US-headquartered companies are guaranteed that we will not allow their Philippine counterparts to have businesses with sanctioned individuals and entities.

And we are not stopping there. Challenges continue to arise as bad actors use every opportunity to threaten peace and human security. Moreover, with ongoing geopolitical tensions leading to a more sophisticated sanctions regime, stakeholders are asking us more questions that are more complex. These threats motivate us to continue our mission. As bad actors double their efforts, we triple ours. We are proactive in our response to threats.

In our increasingly cyber and paperless society, we aim to use modern technology to perform our functions and ease the burden off our stakeholders. During the 9th Bilateral Strategic Dialogue between the Philippines and the United States in 2021, the development of an IT Infrastructure was discussed. That is to create a platform that will handle the online processing of applications for registration and licensing. The almost three years of planning, meeting, and training are paying off today. Today, we are proud to announce the launch of the Philippine STMO e-Licensing Platform.

This platform was mobilized under the Cooperative Threat Reduction Integrating Contract (CITRIC) project. It was borne out of the Cooperative Threat Reduction Agreement (CTRA) between the US and Philippine governments. The primary focus is cooperation in countering the proliferation of weapons of mass destruction.

The salient feature of this online platform includes a one-stop shop for all export control- related services. The e-licensing platform is also accessible 24/7 to all stakeholders. Safeguards have been placed to make transactions more efficient, transparent, and secure. Ultimately, this IT infrastructure project will facilitate the issuance of certificates to our industry stakeholders applying for the cross-border transfer of strategic goods.

DTI expects this infrastructure to help increase industry awareness and compliance with the Strategic Trade Management Act law. This will significantly increase and improve the Philippines’ implementation of our international obligations, thus demonstrating our commitment to peace and security.

At this point, allow me to thank everyone who made this STMO e-Licensing Platform possible:

· Our trusted partners in the US government, whose continuous support played a crucial role in the establishment of our strategic trade system;

· The hardworking personnel at the Strategic Trade Management Office who have demonstrated competence and professionalism in the performance of their mandate;

· Our colleagues from SpinTek, Black and Veatch, and Endec have accommodated our requests to ensure the system’s full functionality and its alignment with Philippine laws, rules, and regulations;

· Our partners in government for their invaluable support;

· And finally, to our stakeholders for their willingness and cooperation in complying with the laws of the land.

In a 7 May 2014 statement on United Nations Security Council (UNSC) Resolution 1540, UNSC President Oh Joon noted that the Asia-Pacific region faces the following challenges: the expansion of nuclear energy and research, the production and storage of hazardous chemicals, the location of some the world’s busiest transshipment points and shipping lanes, and the existence of known terrorist organizations.

In the face of these challenges, the Philippines intends to take the lead in implementing strategic trade policies for the non-proliferation of threats in the region. We reiterate our commitment to strengthening the supply chain of strategic goods. We shall continue to defend and enhance an international rules-based order and ensure that goods capable of being used as weapons for destruction are traded only with those who intend to use them for peace.

This is a beautiful day for peace, and I wish everyone a productive day ahead. *

Date of release: 20 February 2023