Press Statement of Secretary Ramon M. Lopez on Export Performance in Q1 2019
PRESS STATEMENT OF SECRETARY RAMON M. LOPEZ ON EXPORT PERFORMANCE IN Q1 2019
Based on the latest preliminary data from the Philippine Statistics Authority (PSA), our country’s merchandise export performance in the first quarter of 2019 has declined by 3.1%. Specifically, Electronics, which comprises more than half of our merchandise exports, dipped by 1.7% to US$ 8.8B. Non-electronics, on the other hand, decreased by 4.8% to US$ 7.5 B.
In general, we consider this as a reflection of the slowdown in the global economy. Exports of our Asian neighbors decreased even more: South Korea by 8.7%, Indonesia by 8.3%, Singapore by 6.3%, and Japan by 3.9%. Out of 11 trade-oriented Asian economies, 9 countries declined in their export performance and only Vietnam and China registered positive performance.
The Philippines, as part of a global production network is being affected by the negative sentiments brought by the US-China Trade War, since US and China are the top trading partners. According to industry players, global demand for electronic parts and final goods has been shrinking and will continue to weaken in 2019. In the case of the Philippines, this has been mirrored in the decline of exports in certain electronics sub-sectors such as components and devices, control and instrumentation, and telecommunication products to major markets like Singapore and Hong Kong. Meanwhile, weak orders from their principals have weighed down on major PH exporters of Non-electronics such as machinery and transport as well as agri-based exports (e.g., sugar and coconut). Similarly, our exports of wood manufactures continue to be hounded by weak orders from the principals of major PH exporters.
Backed by robust domestic demand, firms are finding more lucrative opportunities to sell in the local market. For example, a quick check with a major producer of shrimps and prawns revealed that they stopped exporting and instead concentrated their sales and distribution in the domestic market. This can partially explain the 22% decline of our exports of shrimps and prawns in the first quarter of 2019.
Additional feedback from major players revealed that our exports are hampered by lingering issues they encounter on costs and inefficiencies in transport and logistics. This continues to slow down the turnaround time in the production and shipments of exporters.
Supply issue has affected export mainstays such as fresh and processed mangoes: season is delayed and shortened due to double whammy of La Nina last year during flowering season and El Nino this year.
In the case of chemicals, there remains the lingering issue of the policy concerning controlled and regulated chemicals, which hampers the turnaround time of our exporters from production to market.
As part of our action plan, we are prioritizing addressing the core issues above (i.e., supply, competitiveness, port operations/logistics, and infrastructure gaps (e.g., R10 is now operational, etc) with relevant government agencies consistent with the Philippine Export Development Plan.
We are continuously working on diversifying our export offerings and destinations. In particular, we are looking at focusing our promotional efforts for the following products and services, among others which we consider as export growth drivers: office equipment, consumer electronics, motor vehicle and motor vehicle parts, high-value coconut products (e.g., MCT coconut oil), forest products (e.g., plywood, fiber board, etc.), and wearables (e.g., footwear, handbags, etc.). On services exports, audiovisual / creative industries (e.g., film, animation, game development), healthcare information management systems, software development, and tourism-related services will receive more focus.
DTI is also pursuing trade initiatives to increase exports to trade partners to help increase exports. Based on recent negotiations, Indonesia has revoked anti-dumping on bananas and allowed for the exports of shallots. They will also invest on coffee manufacturing and processing. There are also talks with Singapore on importation of more agricultural products like fresh fruits and vegetables, meat and poultry products. DTI is also maximizing opportunities under existing preferential trade agreements with ASEAN, China, Japan, South Korea, India, Australia and New Zealand, India as well as with EFTA countries. We are also promoting more products to the US and EU to expand utilization of their GSP schemes.
Trade promotional efforts are also being done on the non-traditional markets in Russia, Africa, Latin America and South Asia. These markets are expected to experience high economic growths and with their huge population can provide for alternative export markets in the near future.
The DTI, together with other government agencies are already trying to provide solutions to these issues, consistent with the strategies laid out in the Philippine Export Development Plan (PEDP). Notwithstanding, from the 2018 total export level of US$89 B, we remain confident that we are still on track in meeting our total export targets to reach a range of US$ 122 to 130 B by 2022. We expect a positive growth trajectory to set in in the subsequent quarters.♦
Date of release: 9 May 2019
Press Statement of Secretary Ramon M. Lopez on Chinese-Only Establishments in the Philippines
PRESS STATEMENT OF DTI SECRETARY RAMON LOPEZ ON CHINESE-ONLY ESTABLISHMENTS IN THE PHILIPPINES
May 7, 2019
Senator Panfilo Lacson is correct in calling out Chinese-only establishments that bar Filipinos from entering. Serving only Chinese clients or any specific nationality in a store is a form of discrimination and is not allowed.
There should be language options or translations in these establishments. In China, Japan, and other countries, they even have English translations for menu and signages, to cater to their major emerging markets who do not speak their language.
We have already directed our regional offices to check the stores in their areas. But please report any violating establishment to us through our hotline: 1-DTI (1-384).
ON RETAIL TRADE LIBERALIZATION
Retail is currently reserved for Filipinos if their equity size is US$ 2.5 million and below. Above that amount, retail establishments can be fully foreign-owned. But the pending Retail Trade Liberalization Bill proposes to lower that hurdle rate to US$ 200,000—or the equivalent of a medium-sized enterprise. The goal of this bill is to encourage more investments and jobs creation, while still providing necessary protection to Filipino micro and small entrepreneurs.♦
Date of release: 8 May 2019
Press Statement of Secretary Ramon M. Lopez on the 25th ASEAN Economic Ministers Retreat
PRESS STATEMENT OF SECRETARY RAMON M. LOPEZ
ON THE 25th ASEAN ECONOMIC MINISTERS MEETING RETREAT
APRIL 22-23, PHUKET THAILAND
ASEAN Economic Ministers (AEM) made headway in six priority issues during the 25th AEM Meeting Retreat on 22 to 23 April in Thailand. In the meeting, we tackled the following issues:
(1) ASEAN Priority Economic Deliverables in 2019;
(2) Criteria and Approach to Guide ASEAN’s Strategic Economic Engagements
(3) Monitoring and Evaluation Framework of the ASEAN Economic Community;
(4) Implementation of ASEAN Trade in Goods Agreement (ATIGA);
(5) Regional Comprehensive Economic Partnership Agreement (RCEP); and
(6) Suggested reforms for the World Trade Organization (WTO).
ASEAN Priority Economic Deliverables in 2019
The ASEAN community supported this year's ASEAN Chair, Thailand, in its priority economic deliverables, namely future–orientation, enhanced connectivity, and sustainability in all dimensions. Progress in these deliverables ranges from digital integration in the 4th Industrial Revolution (4IR) to trade facilitation and connectivity. These priorities were chosen to prepare ASEAN businesses for the advent of new technologies and equip the workforce with appropriate skills to cope with the challenges of said new developments.
Criteria and Approach to Guide ASEAN’s Strategic Economic Engagement
We discussed setting criteria to guide ASEAN Ministers on the forms and level of cooperation with other countries or economic regions. This will include economic significance, degree of convergence on new Free Trade Agreements (FTA), and resource requirement, among others.
Monitoring and Evaluation Framework of ASEAN Economic Community and Implementation of ATIGA
AEM highlighted the need to review and eliminate unnecessary non-tariff barriers (NTBs) implemented by some ASEAN Member States. NTBs make it more difficult and costly to trade. As a representative of the Philippines, I cited that NTBs affect both agricultural (horticultural products, bananas, tobacco, fishery products, meat, young coconut, seeds, poultry, and swine feeds) and industrial goods (electronics, pharmaceutical products, cosmetics, apparel, and footwear). Some of these Philippine products have difficulties entering some markets because of high tariffs and strict import requirements imposed.
On RCEP, AEM reaffirmed its commitment to realize the ASEAN Leaders mandate to conclude the agreement this year. We encouraged the trade negotiating parties to exercise utmost flexibility in the forthcoming sessions, taking into account constitutional and legal limitations. All pending issues must be settled by June if we are to meet the targeted November deadline for RCEP conclusion. Just the same, the agreement should be balanced and mutually beneficial and balanced trade agreement to establish free and fair trade in the region.
Suggested reforms for the WTO
We noted that the WTO is facing issues on rulemaking, transparency and monitoring, and dispute settlement. Specifically, AEM is unified in recognizing the need to fill the vacancies in the WTO’s Appellate Body, which hears appeals from disputes among WTO members. The supposedly seven-member body currently has three members, two of whom will vacate their posts this year. Since the pillar of the multilateral trading system is on the dispute settlement mechanism, we underscored the need to immediately start the process of filling up the vacancies.♦
Date of release: 25 April 2019
Statement of DTI Secretary Ramon M. Lopez on Cement Safeguards
STATEMENT OF DTI SECRETARY RAMON LOPEZ ON CEMENT SAFEGUARDS
Cement is a strategic industry in the Philippines because it is a critical input to infrastructure (Build, Build, Build) and decent homes for Filipinos.
As such, we have to ensure its availability (right price, top quality, right place, sufficient volume) in both the short- and long-term. Having a vibrant domestic industry, under a contestable market where legitimate imports can freely enter, is important in ensuring this.
But relying solely on imports and being at the mercy of global supply and demand situation is risky and irresponsible considering changes in global demand and supply conditions. This will lead to a dependence on imports, leading to the perennial trade deficit.
Even if the cement industry is considered as strategic, it receives no tariff protection whatsoever, as imports currently enter at zero duty. However, safeguard duties are legitimate tools in trade remedies (i.e. allowed under our international commitments such as in the World Trade Organization) to assist industries that have experienced a surge in the importation and a decline in sales and profitability.
In the case of cement manufacturing, imports of cement increased from only 3,558 metric tons in 2013 to more than 3 million metric tons in 2017; and the share of imports (from non-manufacturer or “pure” traders) increased from only 0.02% to 15% during the same period. Equally important, the industry experienced a sharp decline in income (earnings before interest and taxes) of 49% in 2017.
With the elements of surge and injury clearly, established, the DTI is mandated to impose a safeguard duty. In determining the amount of duty, however, the DTI balances the interests of all stakeholders—and has given particular attention to ensuring that supply remains steady and that prices will not increase.
DTI is thus imposing a provisional safeguard duty of Php 8.40 per bag, equivalent to about 4.0%. This is the level that will still ensure price and supply stability as:
1) Imports will still continue, ensuring strong competition;
2) There is currently enough domestic capacity of 35 million MT, to meet demand estimate of 25 million MT, but must still be encouraged to increase, given continuous growth in demand; and
3) That we are requiring the cement manufacturers to maintain their current retail price levels. We will closely monitor the selling price of cement manufacturers and ensure that they will not increase their prices.
At the same time, the safeguards will encourage existing and new players to build additional facilities. New facilities will help us attain a healthy level of domestic capacity that will address our perennial trade deficit, ensure a long-run supply of needed for public infrastructure and homes for Filipinos, and generate more jobs here in the country.
This is a provisional duty, effective for 200 days, in the form of cash bond on imported cement, while the Tariff Commission undertakes and concludes its formal investigation.♦
Date of release: 18 January 2019
Press Statement of DTI Secretary Ramon M. Lopez, 1st Logistics Services Philippines Conference and Exhibition
Press Statement of DTI Secretary Ramon M. Lopez
1st Logistics Services Philippines Conference and Exhibition
6 December 2018, Philippine International Convention Center
Good afternoon to our friends from media. Today government and the private sector banded together for the First Logistics Services Philippines Conference/exhibition. Based on registration reports, there are approximately 500 participants coming from the logistics services industry, government sector, and development partners.
We are here to focus our attention on the logistics services sector. Its vital role in the movement of goods and service and its impact on the economy cannot be overemphasized.
Thus, I am joined here in the panel by both government and the private sector to show the country’s solidarity in pushing forward this sector of the economy.
Think about it. An efficient logistics services sector will not only help the business and its bottomline, it will also help the consumer and the country in general.
Just this morning we heard from the President of the Philippine Multimodal Transport and Logistics Association, Inc. and her positive forecasts on the logistics services sector as a job creator and the sector’s potential for growth.
Transport and logistics are priority sectors in the inclusive industrial led innovation strategy (i3s) and government is poised to provide full support to this industry, as we heard from Asec. Fita Aldaba.
We are circulating to our media friends, the sector’s TEN COMMITMENTS, which serves as guidance in the promotion and development of the logistics services sector.
This “10 Commitments” is a product of series of dialogues among the government, the industry players, and the development partners. It gives a clear-cut direction for all stakeholders in terms of priorities and targets. We have already succeeded in rallying all the concerned sectors to support our priority agenda. The next step is to sustain the momentum and implement the strategies identified in the 10 commitments.
Aside from the conference, we also aim to encourage our exporters to outsource their logistics activities and focus on their core business activity. We hope to link these LSPs through the Logistics Services Philippines Exhibition that will happen tomorrow at the Mezzanine Area of Reception Hall. The Exhibition is organized back-to-back with National Export Congress, which will be participated by 48 logistics services providers (LSPs) offering freight transport service, customs brokerage service, warehousing and storage and cargo handling services. This business-matching activity opens opportunities for our LSPs to link with MSMEs and promote their products and services. We have high hopes that the historic two-day activity will bring positive outcomes for the logistics services sector.
We thank you for your time.♦
Date of release: 6 December 2018
Joint Press Statement on the Occasion of the Signing of the Memorandum of Understanding on the Establishment of a Joint Economic and Trade Committee between the Republic of the Philippines and the Independent State of Papua New Guinea
JOINT PRESS STATEMENT ON THE OCCASION OF THE SIGNING OF THE MEMORANDUM OF UNDERSTANDING ON THE ESTABLISHMENT OF A JOINT ECONOMIC AND TRADE COMMITTEE BETWEEN THE REPUBLIC OF THE PHILIPPINES AND THE INDEPENDENT STATE OF PAPUA NEW GUINEA
17 November 2018, International Convention Centre, Port Moresby
Honourable Ramon M. Lopez, Secretary for the Department of Trade and Industry of the Philippines and Honourable Rimbink Pato, Minister for Foreign Affairs of PNG signed the Memorandum of Understanding on the Establishment of a Joint Economic and Trade Committee, or JETC, on behalf of the Philippines and Papua New Guinea governments.
The signing of the JETC is a milestone achievement for both economies and represents the first initiative to formally engage bilaterally on economic, trade and investment issues.
PNG and the Philippines are both developing member economies of APEC. Apart from continuing close cooperation at the multilateral level, both economies see great potential in enhancing relations at the bilateral level. Building on the long established friendly and cordial relations, the JETC will encourage more mutually beneficial exchanges and cooperation to further deepen existing relations and trade and investment linkages.
The JETC will be a platform to discuss areas of mutual interests and to broaden and intensify cooperation between both economies. Cooperation activities include exchange of information, participation in trade and investment-related activities and promotion of economic cooperation between bodies such as government institutions, professional organizations, business federations, and chambers of commerce and industry.♦
Date of release: 19 November 2018
Press Statement of Secretary Ramon M. Lopez on the Nikkei Philippines Manufacturing Purchasing Managers’ Index (PMI)
On the Nikkei Philippines Manufacturing Purchasing Managers’ Index (PMI)
Joint Statement by Philippine Secretary of Trade and Industry Ramon M. Lopez and U.S. Trade Representative Robert E. Lighthizer
Press Statement of Secretary Ramon M. Lopez on the Issue of Congestion in the Port of Manila
Press Statement of Secretary Ramon M. Lopez on the Price Setting Approach for Cheaper Rice and Sugar
This is in response to President Rodrigo Duterte’s Administrative Order No. 13 which instructs the Executive Branch to find ways in facilitating importation and availability of basic commodities especially rice and sugar.
Import permits can be given for a specific volume per period and at the targeted price so they won’t import to sell at other price points other than the set price. These importers will just pay tariff for their revenues as a way to protect the local farmers.
We have an immediate solution in providing the rice, and the reason why we prefer on buying in supermarkets is because we have greater control as to their sales record and this is not for major profit for them. We computed a reasonable return based on costing and have arrived at a price of Php38 per kilo.
Supermarkets will make the traders and palengkes can continue to sell local rice even at Php44 per kilo if they want because local rice is known to taste better. The good harvest local rice can go down also at Php39 per kilo but at least we don’t have wait for that as consumers are complaining everyday.
Consumers who prefer local rice can also pay premium because it tastes better. It was imported at Php80 per kilo but when you go to local stores the prices starts at Php120-180. But basic rice should be made available so consumers always have a choice.
As I end, I want to make it clear again that this will give only to those who will commit to sell at the targeted price. I sincerely hope this is one quick solution for everyone while we are waiting for rice tariffs. In that way, it will keep traders on their toes.♦