Keynote Message of Secretary Ramon M. Lopez, 1st Logistics Services Philippines Conference
Keynote Message of Secretary Ramon M. Lopez
1st Logistics Services Philippines Conference
6 December 2018, PICC, Pasay City
Magandang umaga sa inyong lahat. Salamat, Usec. Rowel and all our partners. As you know, under his term, we are holding the first Logistics Philippines Summit. This really is for all you, stakeholders of the logistics sector. Palakpakan po natin si Usec. Barba.
We’re giving importance to your sector because you are the lifeblood of the economy. You determine the way we do business, in terms of reaching true competitiveness and efficiency which, as you know, has impact on the cost of doing business.
The usual issues at hand are inflation. Logistics is important keeping the prices low, because of the cost of transporting goods. I was asking some data on the ratio of logistics cost to total operations. And the Philippines is not the best, but not the lowest. We are now 27% of the total cost. By comparison, was it Thailand at 21%? It’s really important that we pay attention to this sector.
I’d like to thank all of you, because this is a busy season for all of you because of Christmas. There are many deliveries to make, and yet you are here. Thank you for lending us your time. We’re confident that your time here will be well spent because we will be tackling issues and challenges that are vital to our sector.
Speaking of holiday deliveries, we should give the logistics services providers a pat on the back for assuring that commodities for the Yuletide are well-secured and delivered. They make sure that there is an ample supply of goods in the market, be it Noche Buena items, basic commodities, or gift items for everyone.
Thankfully, we now have a better situation. You’ve heard that the inflation rate has gone down to 6%. I’m sure January – February, we’ll be seeing inflation rates below 5% already.
As I said, the logistics sector is the lifeblood of any business, and therefore the lifeblood of the economy. It is important, as it affects the overall profitability and cost of business. And for the country, it affects the competitiveness and efficiencies indices.
Undersecretary Barba has mentioned the various association and stakeholders present here today. So, really the intention is not just to have a conference but to drill down on the issues and challenges. Hopefully, we can come up with solutions as a sector. We aim to build a roadmap that we will not just put in a shelf. We want to tackle the challenges identified so we can improve our competitiveness ranking.
TRANSPORT, INFRASTRUCTURE, AND LOGISTICS SERVICES
We have also invited today, our partner in the logistics sector, the Department of Transportation. Salamat Asec. Perez for representing Sec. Tugade. We’re glad to have you on board, Asec. You’ll be part of the discussions later. I know it’s not just about services, but also our requirements for infrastructure.
The mandates of DTI and DOTr complement each other in terms of fostering growth of the logistics services sector. A good way to imagine this is by comparing our national economy as a functional human body. The arteries and veins that deliver blood represents the transport system and infrastructure, which is care of DOTr. Meanwhile, the blood that carries essential nutrients and runs through the veins represents the logistics services sector, which is promoted by DTI.
As I keep reiterating, a network of reliable transport system and infrastructure facilitates the flow of goods and services through an efficient logistics services. Moreover, a seamless, unobstructed flow of goods indicates the health of our national economy.
In other words, we have to remove all the blockages, the buildup of cholesterol in the veins. We should be taking more Lipitor to remove these blockages.
Kidding aside, those solutions that we need will be the Build Build Build, the government’s massive infrastructure program. There are 75 projects in the program, foremost of which are the NLEX-SLEX Connector Road that will ease up the congestion in EDSA; Tarlac-Pangasinan-La Union Expressway Project in Central Luzon; Metro Cebu Expressway; the Mindanao Logistics Infrastructure Network in Davao; the Laguna Lake Highway; the Matnog-Sta. Elena-Bulusan Road in Bicol; and many more. These are just examples.
To ensure the competitiveness of the logistics services sector, DTI—through the Competitiveness Bureau—initiated a program called TRACK. T-R-A-C-K stands for Transforming the logistics services through Regulatory reform, Assurance of quality, Communication and capacity-building, and Knowledge management.
In the past months, we’ve achieved the following major results under the TRACK program.
- High international shipping costs – In the recent months, DTI has promptly acted on the complaints of traders regarding excessive fees imposed by foreign carriers. We have requested the Philippine Competition Commission (PCC) to look into the excessive and unreasonable charges imposed by foreign shipping lines to importers and exporters. This is amid the growing concerns of the business community about these surcharges, which continue to undermine the competitiveness of local industries.
- Empty container management – We continue to conduct dialogues with the truckers’ group, the container yard operators, and exporters regarding the issue of empty container management. We are closely monitoring the developments about this concern. We are closely working on this with the various sectors.
- Assurance of logistics quality – The DTI-CB initiated the drafting of the Philippine National Standard for Road Freight Transport (Logistics) in partnership with the Bureau of Philippine Standards (BPS) and German International Cooperation (GIZ). Last week, the Technical Working Group convened for the finalization of the Guidance Document. We hope to conclude this before the end of the year.
The transport and logistics sector is one of the 12 Industry Priorities under DTI’s Inclusive, Innovation-led Industrial Strategy (i³S). Via this strategy, DTI has been active in promoting the sector to attract investments and has initiated reforms to address reliability, high logistics cost, and customs procedures.
TRADING ACROSS BORDERS (TAB)
Finally, one of the areas that we’re focusing on is the trading across border indicator under the Doing Business Report published by the World Bank. A series of respondent’s group meetings are currently being conducted to validate the reforms undertaken to facilitate outbound and inbound flow of trade.
I am also pleased to note that we expect drastic improvements in logistics-related government transactions with the implementation of Republic Act 11032, or the Ease of Doing Business Act. As we reported before, we are finished with the Implementing Rules and Regulations and have submitted that to the Office of the President. We are just awaiting the appointment of the Director General for the soon to be established Anti-Red Tape Authority. Hopefully this can be done before the year ends.
We started with identifying permits, licenses, and accreditations that are deemed burdensome by logistics services providers (LSPs). The list will be submitted to the Anti-Red Tape Authority (ARTA) for review and appropriate action.
We are confident that we can achieve our mission of a developing a globally-competitive logistics services by institutionalizing reforms to provide a conducive business environment for LSPs. These efforts will result to an efficient and reliable logistics sector that will be beneficial to all stakeholders: the LSPs, the businesses, and consumers.
Through today’s conference, we are also confident that we can deepen the collaboration between the public and private sectors as part of our overall effort towards nation-building. Together, we will achieve our goal—as envisioned by President Rodrigo Roa Duterte—of empowering our countrymen wherein they can determine a better quality of life for themselves.
Thank you and wishing you a fruitful conference today. Mabuhay tayong lahat.
Keynote Address of Secretary Ramon M. Lopez, Philippine Quality Challenge (PQC) Awarding Ceremony
Keynote Address of Secretary Ramon M. Lopez
Philippine Quality Challenge (PQC) Awarding Ceremony
13 December 2018, Board of Investments Building
Good afternoon everyone. First of all, hihingi po ako ng paumanhin sa aming delay sa pag-akyat dito, due to a long meeting we had downstairs. It was a year-end meeting. Napakaimportante that we also plan for next year, to prepare for the huge challenges, especially in the trade and industry sector.
Let me also share with you the developments about the priorities and programs of the country. We are in a very good situation in the sense that ang growth ng ating bansa ay napakaganda. Over 6% GDP growth, much of this can be attributed to manufacturing. The manufacturing sector is growing faster than 6%, in fact nagpo-post po siya ng growth between 6% to 8%. That’s very important, because we ride the future of our country in this sector. Our exports may be growing, but it’s not growing faster than imports. That’s why it’s really important for the manufacturing sector not only to grow, but to grow fast.
As we highlight the importance of that, it is also important to grow the manufacturing sector to supply the needs of a growing economy. As the economy grows, there is increasing demand for cement, steel, and other products. Kapag kulang ang supply, anong nangyayari? Nag-iimport. That’s why we have large imports, hindi mapantayan ang demand. Ang resulta, we are having a trade deficit.
The trade deficit is not new; we are a perennial trade deficit country. Bata pa lang ako at tayong lahat, may trade deficit na sa Pilipinas dahil lagi tayong nag-iimport ng mas marami kaysa nag-eexport. In the administration of President Duterte, we are trying to leapfrog our manufacturing sector. Only then will we have a strong, vibrant, innovative, and quality-oriented manufacturing sector that can match the demand of the local economy and the exports. ‘Yun po ang importansya ng ginagawa natin ngayon.
For so many years, ang growth ng manufacturing is around 3%, now it’s in the 6% to 8%. Hindi na po naiiwan ang manufacturing industry. Dahil sa ating ekonomiya, nandiyan po ang ang, industry, at services. Madalas nago-grow ay services. Ngayon si industry, humahabol na.
In that context, I’d like to specify, in relation to our activity this afternoon, the importance of quality. If we are to grow, hindi pwede yung pwede na at gawin ‘yung ginagawa natin dati pa. There has to be a culture of innovation, excellence, and quality. As we pursue quality-oriented manufacturing growth, down the road we want to tell the world, na kapag gawang Pilipinas, gawang kalidad.
We want to associate ourselves with Kalidad Pilipinas. That’s why in the last Philippine Quality Awards we said that we have to hone that particular additive. Because even Japan before, they are not known for quality products. American muna, then later on Japan, then Taiwan. Ngayon China, naririnig niyo just a few years ago kapag China-made, hindi maganda ang quality. Pero ngayon, China is getting that image of quality. Our cellphones, iPhones are made in China.
You have to earn that respect, earn that image. We have to work for that. It’s important in events in events like these and partners like you, the academe and the research institutions. Of course the MSMEs [micro, small, and medium enterprises], we have to start them young. We really want to start early, that culture of quality and excellence.
The DTI is ready to support you through trainings, seminars, technical assistance, anything that we can do to help your sector. Undersecretary Barba was discussing that a few weeks ago, we had the PQA [Philippine Quality Awards], dapat magkakasama na siguro ‘yung award na for this, from SMEs to big companies. Dapat sa Malacanan na gawin para makilala rin kayo ng Presidente.
Ang advocacy ng ating Presidente ay magkaroon ng solid na industrialization strategy. Siya nga po ang nagtutulak sa amin, na dapat ang ating industry, may iron and steel din tayo. So kaya ngayon, masaya kami na mag-aannouce bukas na may pipirma na ng integrated iron and steel project. Integrated, ibig sabihin mula sa minerals, iron ore into the slabs, ito ‘yung parang chocolate bars na mahaba. Ito ay nagiging sheets at nagiging body ng mga appliances, mga kotse. Hindi po ginagawa sa atin ‘yan ngayon.
Even ‘yung mga billets na pahaba na kapag tinunaw nagiging rebar na gagamitin sa construction, dito na rin gagawin. Ngayon kasi ini-import natin ang mga raw materials. This is our way to address the trade deficit. Ibig sabihin, binaba mo ‘yung imports, nakapag-export ka pa. That is our industrialization plan, and quality will always be there.
We all have roles to play. Please maximize the programs that we have and strive for continuous innovation. Good afternoon and Merry Christmas.
Speech of Secretary Ramon M. Lopez, 3rd ASEAN-India Business Conference
Speech of Secretary Ramon M. Lopez
3rd ASEAN-India Business Conference
27 November 2018, Kuala Lumpur, Malaysia
India has been a strategic partner for the past six years. And we would like to thank of course India for its Look East, and later on upgraded to Act East policy. Now, we have about 30 sectoral dialogues in place. These are the mechanisms to continue the discussions and these are in the areas of external affairs, defense, connectivity, commerce, telecommunications, agriculture, energy, environment, and tourism.
Importance of Economic Cooperation
Allow me to share first the spirit of economic cooperation within ASEAN and with its Dialogue Partners that include India, which was apparent two weeks ago in Singapore at the 33rd ASEAN Summit and Related Summits held on 11 – 15 November. At this event, we—the ASEAN economic ministers—signed the ASEAN Agreement on E-commerce, which would govern cross-border e-commerce in the region. We also concluded the negotiations for the ASEAN Trade in Services Agreement (ATISA), and finalized the Fourth Protocol to Amend the ASEAN Comprehensive Investment Agreement (ACIA). The ATISA, which is on service, aims to deepen services sectors in ASEAN, while ACIA will help maintain the attractiveness of the region as an investment destination.
Likewise, we convened with Trade Ministers of India, Australia, China, Japan, Korea, and New Zealand to announce the substantial progress made in the negotiations for the Regional Comprehensive Economic Partnership (RCEP). We had 24 rounds of RCEP negotiations, 7 chapters have been concluded. These are in the areas of: Customs Procedures and Trade Facilitation (CPTF); Government Procurement (GP); Institutional Provisions; Sanitary and Phyto-Sanitary (SPS) Measures; Standards, Trade Regulations, and Conformity Assessment Procedures (STRACAP); Small and Medium Enterprises (SME); and Economic and Technical Cooperation (ECOTECH). We also agreed that RCEP is at the final stage. We had substantial progress this year in Singapore and we are poised to conclude for next year in Thailand by 2019. The urgency of concluding RCEP is highlighted given the rising trade tensions and protectionism, in order to give boost to free, fair, and open trade. RCEP will be the largest free trade deal in the world in terms of population (covering about 3.6B), income (covering 1/3 of the world’s income), about a third also of the world’s trade, and investment close to 27%.
The spirit of economic cooperation was likewise evident at APEC Papua New Guinea just a week ago or two weeks ago. Here, our Philippine President Rodrigo Roa Duterte called on his fellow leaders for "inclusive globalization" to empower the smaller member-nations. This means giving smaller member-nations and their MSMEs greater capacity to manufacture even as they provide services to bigger countries. And the bigger countries are then expected to open up more market access. President Duterte likewise pushed for digitalization of the MSMEs so that jobs can be sustained, and the MSMEs will have to be also retrained and empowered so they can ride on the growth of digitalization, especially of the economy.
On the sidelines, the Philippines signed also the Memorandum of Understanding with Papua New Guinea on Joint Economic and Trade Committee (JETC).
Of course as you know already, APEC was not able to issue a joint statement. And the Chairman’s statement was actually issued in consideration of certain disagreements. And I must tell you, these are disagreements in terms of words and I believe also of certain principles.
But ultimately, we believe that the results of the summits at APEC and ASEAN have great significance in creating opportunities for trade and investments that would generate income and jobs for our people.
ASEAN as trade platform
That’s why events like the ASEAN-India Business Conference are important as they give members in our region the opportunity to strengthen trade and investment ties. These events also support the ASEAN Economic Community (AEC), which promotes the economic integration in ASEAN.
Furthermore, ASEAN is now virtually tariff-free. Efforts are now focused on trade facilitation initiatives. But of course, one thing that we have to address would be the challenge of Non-Tariff Measures (NTMs). If we are to grow intra-ASEAN trade and trading also with our dialogue partners, we will have to settle and address all these Non-Tariff Measures.
Decades after the cold war and geopolitical alignments that limited past relations between ASEAN and India, the ASEAN-India collaborations have started to prosper. It is in the right direction but definitely there’s still a big room for improvement.
The importance of ASEAN’s collective strength in leveraging greater trade and investments can be seen in the current relationship of ASEAN and India.
The ASEAN-India Free Trade Area (AIFTA) was made with the signing of the Framework Agreement on Comprehensive Economic Cooperation between ASEAN and India in 2003; as well as the signings of the Protocol to Amend the Framework Agreement and of the AIFTA Trade in Goods Agreement (AITIGA) in 2009. Our FTA’s objectives were the following: bolster economic cooperation; liberalize trade in goods and services in a progressive manner; and facilitate economic integration between ASEAN and India, among others.
Since then, ASEAN-India merchandise trade has garnered positive momentum. Bilateral merchandise trade between ASEAN and India expanded to US$73B in 2017 from US$56.7B in 2010, according to data culled from the ASEAN database. Annual growth of ASEAN-India merchandise trade averaged 9.8% for 2010-2017 period. Mineral fuels and oils have been the top tradeable item, representing US$14B, or 20% of ASEAN-India merchandise trade. ASEAN’s merchandise exports to India were valued US$45B in 2017, accounting for 62% of the trading relationship. Meanwhile, ASEAN’s imports from India amounted to US$28B, or 38% of the total. Between 2010 and 2017, ASEAN’s exports to India grew by an annual average rate of 8.1%, whereas ASEAN’s imports from India climbed by annual rate of 13.5%. So now, ASEAN has imported more from India. Last year, ASEAN accounted for 10.4% of India’s export and about 10% as well of India’s imports. And these series of 10 percents, in terms of FDI, the FDI inflow to India from ASEAN is about 10% also of India’s FDI.
Despite this, we believe that there is still so much unexplored potential for trade and investment partnership between India and ASEAN. With ASEAN’s population of over 600M and India’s 1.3B, these two giant economies—both dynamic and fast-growing, and undergoing reforms and liberalization—should consider further trade and investment opportunities that are more open to each other.
With India, ASEAN can maximize trade and investment opportunities in the areas of pharmaceuticals, automotive, manufacturing, textile, and business process outsourcing. What’s more, a strengthened partnership between ASEAN and India can give SMEs a larger free trade area to work with as we make them part of the global value chain. How do we do this? During the APEC meeting, I advocated for greater focus on training, retraining, digitalization, and the importance of cooperation in pushing for SME training.
Likewise, as our President had said during APEC, we need to push for “inclusive globalization” to empower the smaller member-nations and their MSMEs.
Certainly, economics, connectivity, security have always been at the center of ASEAN-India relations.
Now, moving quickly to the India-Philippine Relations. On the part of the Philippines, we have a lot in common with India as the two of the world’s fastest growing economies. Philippine GDP growth averaged 6.3% in the three quarters of 2018, and for several quarters since 2010 has been averaging over 6%. Meanwhile, India’s GDP growth averaged around 8% in the first half of the year. For both economies, the growth drivers are similar: capital formation and government spending on the expenditure side; and services and industry—which include construction and for the Philippines’ case, more manufacturing or higher growth in manufacturing on the production side.
Presently, India is our 14th top trading partner, and our 18th export market, our 14th import supplier. In 2017, total trade between our two countries amounted to US$2.24B. Not too much but definitely a big room for improvement.
The visit of President Duterte in New Delhi early this year likewise gave a clear signal that India is an important trading partner. In fact, that visit resulted into several business and commercial agreements, most of which are in fruition stages already. All of this means that there is much room for improvement and the opportunities are numerous between the Philippines and India. With both countries experiencing robust economic growth, there’s good ground for many industry complementation. The Philippines’ consistent growth of over 6%, supported by growing manufacturing sector, offers lots of prospects where we can work together.
For example, we can gauge assistance and learn best practices from each other in the fields of industry development, BPO, and pharmaceutical industry. Both countries have emerged as well as frontline service sectors in the BPO industry. In fact, most of the top Indian companies in Information and Communications Technologies (ICT) have chosen to locate in the Philippines as their strategic second location to service global markets.
Among the priority sectors that the Philippines is considering for promotion to India include cooperation in the fields of ICT, telecom, automotive components, pharmaceuticals, and Public-Private-Partnership (PPP) in infrastructure development, as well as in energy and power development. We also want to explore market potentials for products such as high innovation and design driven products for niche markets, electronics and semi-conductors, hospitality, and education.
Speaking of pharmaceuticals, we hope to attract Indian pharmaceutical companies to set up operations in our country. This will not only create more jobs for Filipinos, it will address the high prices of medicine in the local market for the Philippines. The Philippines offers expanded manufacturing base and market for Indian companies.
To this end, the Philippines is seeking to capitalize on the Indian Government’s Act East policy, which focuses on strengthening trade and investment relations with its neighbors in the East. We are also in a unique and strategic location as an entry point for Indian businesses to enter the Philippines and ASEAN market.
I must note also that the Philippines has established a market access partnership with GSP in the US and GSP+ privileges in the EU.
This brings us full circle to where we are today. As our discussions in the ASEAN-India Business Summit will surely help us deepen trade and investment ties in the region. But through the application of “inclusive globalization,” we can warrant that the economic growth that will result from greater trade balance between ASEAN and India. This will be inclusive for all our people towards peace, progress, and shared prosperity. I am sure that the goal everyone here will appreciate will be that we need to attain shared prosperity for all.
Speech of Secretary Ramon M. Lopez, Manufacturing Summit 2018
Speech of Secretary Ramon M. Lopez
Manufacturing Summit 2018
Nov. 22, 2018, PICC
Magandang umaga sa inyong lahat. Maraming salamat sa pagsama ngayong umaga.
Salamat President and Chairman ng Federation of Philippine Industries Jess Aranza sa ating partnership in this Manufacturing Summit. Of course Chairman Emeritus Carlos, Former Secretary Che Cristobal, ating pong partners agencies, business chambers, industries, government, and academe.
I must start with saying also that I’m not only a champion of MSMEs, but also a champion of the manufacturing sector. If you’ve been hearing the statements that we’re issuing or answers to interviews, I’ve been really pushing manufacturing to have more sustained growth in our country.
And I’m always citing and bragging about the kind of growth that we’re having in manufacturing in the recent years. We’ve been citing growth rates of 6% to 8%, which have not been achieved for many years, but now we are hitting those numbers in a consistent basis. And that to me is a good indication that we’re on the right track. Pero marami pa tayong gagawin. Kaya kung si President Duterte ay galit sa pusher, hindi siya magagalit sa atin dahil pusher tayo ng manufacturing sector.
In answer also, bago ko makalimutan, to the concern of the Chairman Aranza. In fact, one item that we addressed is the issue on steel importation because of the ratio that you cited that for every 20,000, we sample….So what we did in the steel, because of the very small sample taken, for only 5,000 only three bars. We’ve revised the Department Administrative Order already. And we’ve tried an ISO sampling size. If I remember right, for a 5,000 metric ton, it’s over 100 pieces now, no longer three. Marami nang samples so we can be assured of the quality. It’s really important to assure standard to our people. We’re doing that for cement and we’re doing that also for the steel industry. That Department Order has been issued po, just to update our partner.
We are also reviewing the inclusion of glass in the mandatory listing. As we push for manufacturing, it’s not enough that we have a supportive environment, but we really have to address these issues of standards, protection to the consumers, and to make sure that there are no illicit or unfair trading practices. So we are also your partner when it comes to guarding against smugglers who are really killing the industry,
Hindi po natin papayagan ng ating pangulong Duterte yan. Kung galit na galit yan sa mga drug pushers, lalong galit yan sa mga smugglers. Yan ang pumapatay ng mga trabaho ng mga kababayan natin, mga trabahong gusting-gusto niyang ibigay sa ating mga kababayan. Kaya number one na kalaban ng mga smugglers ang ating Pangulo. Mag-ingat na po, warning na po sa mga smugglers.
I would like to read the speech.
I would like to thank all of you for coming to this year’s Manufacturing Summit. Holding the yearly summit is part of DTI’s continuing commitment to sustain the resurgence of the manufacturing sector as a major pillar in our pursuit to become an industrialized nation and achieve inclusive growth in the country.
I also wish to thank the Federation of Philippine Industries, the Voice of Philippine Industry, for partnering with us in hosting the Summit this year.
PH MANUFACTURING IN 2018
Our economy has had a strong, sustained performance growing at an annual average rate of 6.4%. A key driver of this growth is our manufacturing sector, which grew at an average quarterly growth rate of 7.6% in the same period. I always push for manufacturing because it is the sector that provides decent jobs on a sustained basis.
If you look at some numbers beyond the GDP growth, we see a lot of growth on steel and cement. Kulang ang manufacturing, imports ang coming in. We have to replace that. We have to import substitute. We have to increase our capacities on steel, Atty. Che Cristobal. And also expand the capacity on cement. We have to do these things locally.
We have more competitive industries. We don’t have to give them tariff protection already, unlike in the past decades—that for them to survive, we have to protect them with tariffs. Tariffs now are very low; we just have to apply the right standards and internal controls. With the reasonable amount of protection, our industries survive. Because of technology they become competitive.
In the first three quarters of 2018, the country’s GDP still grew above 6%, keeping the Philippines among the top economies in the region in recent years. Despite this, we remain confident and optimistic that the sector will pick up by the end of 2018 and in 2019 and in the years ahead, as we continue to formulate and implement policies and roadmaps. The focus there is to remove the roadblocks in the roadmap. Actual action needed to answer the needs of those clusters and industries.
Consistent with the President’s socioeconomic agenda, we fully support the Tax Reform for Attracting Better and High-quality Opportunities (TRABAHO) bill, which has been approved in the House and now pending in the Senate. TRABAHO is set to reduce corporate income tax rate at a level much closer to our neighbors—from 30% to 20% in a period of 10 years. It will also rationalize our fiscal incentives to make them targeted, time-bound, performance-based, and transparent, consistent with our Inclusive Innovation Industrial Strategy (i³S).
We are working closely with the Department of Finance (DOF) and the Senate, so we can have provisions that are effective, but at the same time, manage transition as we shift the tax regime and minimize risk that are being discussed in different fora like concerns being raised on the sudden change, etc. We are working with DOF on several provisions, but in totality, we definitely support the bill. It will be really beneficial, it is a reform that will really attract the investments moving forward. It will level the playing field because we are lowering the corporate income tax for most companies. Mas maraming magbe-benefit doon.
Some provisions that we are working on are:
- The extension of the Income Tax Holiday (ITH) to five (5) years, instead of three (3), as well as lengthening the income tax-based incentives to five (5) years, instead of two (2). You can disregard the numbers because these are still being discussed. But you know the general direction is to provide a smoother transition;
- The extension of the domestic input expense incentive (as an additional deduction) for five (5) years after the ITH period in order to encourage exporters and manufacturers to source their raw materials locally (thereby addressing missing linkages and gaps in our industries’ supply and value chains);
- The inclusion of VAT zero-rating for direct and constructive exports, regardless of location, whether ecozones or freeport zones (this is intended to shift behavior away from low value, back-end processes, and legacy products, which are heavily dependent on imported materials, towards more high-value added processes and parts and components that can be produced domestically based on our strengths and comparative advantage);
- The reduction of the 90% export threshold entitled to VAT exemption and zero-rating, as the case may be, I won’t gove any number yet. But this is also to smoothen the transition and also minimize the impact to export-oriented industries.
- Providing a reduced corporate income tax incentive based on performance to footloose industries, or those economic activities that rely solely on low labor cost or does not require high technology but are needed as part of the supply and value chains and whose operations are sensitive to any cost increases;
- Allowing the continued application of gross income earned (GIE) based on performance or, alternatively, increasing the 5% GIE. Just so it can be workable on both sides;
- The inclusion of 100% additional deduction on the costs of participation in international trade fairs so that we can give extra push to these products. Wala tayong kasupport-support dyan. After we manufacture our products, we also have to market it.;
- The extension of the GIE transition period from 5 to anywhere 10 years to 15 years if possible; and,
- The maintenance of the “one-stop shop character” mechanism of ecozones and freeport zones in operations of registered enterprises by providing for the local government share allocation during the corporate income tax (CIT) period.
We’re working closely with the DOF to ensure that the transition will be smooth and also we have to protect the manufacturing base for exporters. The long-term solution to our perennial trade imbalance is to have a strong and wide manufacturing base. We have to produce a surplus. We have to strengthen the manufacturing base to serve the local requirements and export the surplus. If you don’t have enough capacity, then you would always be lacking in export supply.
But the good news on imports is, its composed mostly of capital goods. So this is preparing of the future to expand our capacity. The kind of growth that we’re having is one that we really like to have, building the capacity for the future. It’s not a consumption-led growth. Our growth rate now is investment-led, government spending-led because of the infrastructure buildup.
On the production side, it is now industry and manufacturing-led, as well as services. In agriculture, from negative, it is now positive, although a very small percentage. But we hope to see that grow with support on agriculture and productivity building.
EASE OF DOING BUSINESS & COMPETITIVENESS
Other reforms that we are doing, the President signed the Ease of Doing Business law and our IRR is ready to be officially issued once the Anti Red Tape Authority is established and the Director General is appointed. Right now, I must say that the law is in effect. The IRR just provides the details for the implementation, but the law itself is in effect. So if you have complaints on transactions that are taking too many days, like over 20 days, you can already file a complaint. Kung pinahihirapan kayo sa mga frontline service transactions with the government, you can already file complaints with the DTI or the Civil Service Commission.
Meanwhile, our Competitiveness Bureau, which continues to serve as the ad hoc secretariat for the EODB law. We are likewise planning to scale up Project Repeal, which would remove antiquated and redundant rules and regulations in government.
Nonetheless, we are heartened by our most improved performance in the latest Global Competitiveness Report of the World Economic Forum, in which we leaped 12 places and ranked 56th of 140 economies. We believe that we could continue doing better in the coming years.
We are also doing something with starting a business, putting them in one portal. If you remember, I think it was in this hall that we shared that we planned to have a one form system. Filling it up, paying, and having your certificate on the same day. Malapit-lapit na po. We have the portal already, where you have all the information needed by the government agencies will now be placed in that one portal. All you have to do is to fill up that one form and that process will already run by itself and hopefully you can register your business in less than one hour. In fact, 40 minutes yung target namin in filling that up.
FILIPINNOVATION & ENTREPRENEURSHIP
As we carry out reforms domestically, we recognize the impact of global developments on our industries.
With the advent of the Fourth Industrial Revolution, we are working to prepare our firms to seize opportunities and address the challenges brought about by disruptive technologies.
The adoption of Industry 4.0 technologies could spur the development of new production techniques and business models; transform global production systems; and drive new, more distributed and connected value chains. These could put at risk the viability of low-cost manufacturing and services exports as a source of growth and development.
As such, we have formulated the Inclusive Filipinnovation and Entrepreneurship Roadmap that will help us innovate our industries. To implement the recommendations of the Roadmap, we signed an MOU with the following agencies: the departments of Science and Technology (DOST), Agriculture (DA), Education (DepEd), and Information and Communications Technology (DICT); the Commission on Higher Education (CHED); and the National Economic and Development Authority (NEDA).
After DOST turned over the chairmanship of the Filipinnovation Council to us, DTI formed an innovation group to coordinate and monitor the implementation of the Roadmap. Our first meeting will be in January 2019 to discuss the Roadmap and the next steps to move its implementation forward.
Our major recommendation in the Roadmap is the creation of Regional Inclusive Innovation Centers (RIICs), which would serve as the cornerstone of i³S and the heart of our country’s economic transformation. The RIICs would bridge the gap between government, industry & academe, and create the regional ecosystem covering both virtual & physical connectivity of the various stakeholders and players (including universities, R&D labs, S&T parks, incubators, fab labs, co-working spaces, investors, LGUs, start-ups, SMEs, and large enterprises).
We’re making sure that our industries are innovation and R&D oriented by linking them with academic institutions and we also ensure that the academic institutions are coming out with relevant research work that would be needed by the industry, as they are commissioned to conduct certain studies and more importantly solutions to industry problems.
Presently, we are working with the USAID STRIDE Program in building the regional innovation and entrepreneurship ecosystem in four pilot regions: Cebu, Cagayan de Oro, Davao, and Legaspi. In these regions, our Negosyo Centers will become a key element of the RIICs we envision to establish.
The Philippine Embassy in Tel Aviv has also helped us send an Innovation and Entrepreneurship Mission to Israel recently. The mission not only learned from Israel’s innovation experience in terms of innovation policy implementation, but also how it built its innovation ecosystem.
Lastly, DTI just signed a Country Program Framework with the United Nations Industrial Development Organization (UNIDO) to pursue innovation, Industry 4.0, and industrial upgrading in the Philippines. This would include cooperation in the following areas: (a) building the innovation ecosystem in the Philippines particularly for the automotive, semi-conductor and electronics, IT-BPM, aerospace, and biotechnology industry clusters; (b) developing a roadmap for the adoption of Industry 4.0 in the above industries and upgrading strategies for other manufacturing sectors, such as textile and garments, leather, iron and steel, food processing, and marine-based sectors; and (3) establishing an Academy and Innovation Center for small and medium-sized enterprises (SMEs) with focus on the above-mentioned priority industries, including agribusiness.
I am glad that UNIDO’s Dr. Olga Memedovic, who will lead the conduct of preliminary assessment of the above cooperation areas, will speak at the Summit tomorrow.
PHILIPPINE TRADE AMIDST US-CHINA TENSIONS
While we adapt to the global technological revolution, we are also bracing ourselves in the face of the increasing trade tensions between the United States and China. It is our prayer that those tensions will subside because nobody wins in a trade war. We are also friends with both countries. They are both important trading partners.
Both countries are among our key trading partners. In 2017, China was our top trading partner, being our 4th-biggest export market and largest import supplier. In the same year, US was our 3rd major trading partner--serving as our 2nd-biggest export market and 4th import supplier.
China’s import tariffs are seen to have an impact on our exports to China of agricultural products, aluminum waste and scrap, and line pipes. Meanwhile, we have three key products that may be affected by US measures: steel, aluminum, and photosensitive semiconductors. But as of the moment, we have filed our request for exemptions. So far, the effect has been very minimal. There are even upsides as these countries are exploring possible relocation in the Philippines to enter other markets. We’ve been getting inquiries in that regard.
We are reviewing our trade position, exploring our options, and working towards strategically engaging our trade partners and assisting our local firms to navigate the turbulence in world trade.
As the Chinese saying goes, we certainly live in interesting times. We’ve seen that in the recently-concluded APEC and ASEAN, but definitely, I can say that all these countries are still working toward continuing globalization towards open, free and fair trade environments. We will continue to observe this while working toward the competitiveness of our industries.
I am confident that with everyone’s continued collaboration, we can realize our President’s vision of a better life for all Filipinos.
Thank you and mabuhay tayong lahat.
Message of Secretary Ramon M. Lopez, PHILCONSTRUCT 2018
8 November 2018, World Trade Center, Pasay City
Message of Secretary Ramon M. Lopez, 3rd Philippine Construction Congress 2018
3RD PHILIPPINE CONSTRUCTION INDUSTRY CONGRESS 2018
8 November 2018, Conrad Hotel, Pasay City
PH Construction Industry
Speech of Secretary Ramon M. Lopez, Kalye Negosyo Graduation
Speech of Secretary Ramon M. Lopez, OKB Trade Fair
Speech of Secretary Ramon M. Lopez, Bahandi Eastern Visayas Trade Fair
Talk Points of Secretary Ramon M. Lopez, Inclusive Innovation Conference 2018
Message of Secretary Ramon M. Lopez, Memorandum of Agreement (MOA) Signing of DTI and the Bangko Sentral ng Pilipinas (BSP)
MOA Signing of DTI and BSP
17 September 2018, Bangko Sentral ng Pilipinas, Manila
Speech of Secretary Ramon M. Lopez, Philippine Garments, Leather Goods Industries & Fabric Expo
Philippine Garments, Leather Goods Industries & Fabric Expo
23 August 2018, SMX Convention Center, Pasay City
Thank you and good morning, everyone. Thanks to Dr. Andrew Kay, Mr. Nick Reyes. Regards to Mayor Calixto. For the information of everyone, Pasay City was one of the major awardees in the recently concluded Competitiveness of Cities and Municipalities. Pasay is one of the major competitive cities and municipalities in the country today.
Message of Secretary Ramon M. Lopez, 6th Competitiveness Regional Summit
16 August 2018, PICC, Pasay City
Normally they’ve already decided to come in the Philippines to invest. But selecting the site, where to locate, is the next question.
GovTech as Driver of Competitiveness
Speech of Secretary Ramon M. Lopez, 4th Forum on the Mining Policy Direction of DENR
4th Forum on the Mining Policy Direction of DENR
July 31, 2018, La Breza Hotel, Quezon City
Message of Secretary Ramon M. Lopez, Go Lokal! Launch at NAIA Terminal 3
Go Lokal! Launch at NAIA Terminal 3
Keynote Address of Secretary Ramon M. Lopez, All-New Vios Ceremonial Roll-off (Under CARS Program), 19 July 2018
Keynote Address of Secretary Ramon M. Lopez
All-New Vios Ceremonial Roll-off (Under CARS Program)
July 19, 2018, Sta. Rosa Laguna
Konichiwa. Ohaiyo Gozaimasu.
Makino-san; Moriyama-san; Mr. Rafael Villareal; our very good partner, the Congresswoman from the automotive capital of the Philippines, Madam Arlene Arcillas; Mayor Danilo Ramon Fernandez; the Vice Mayor as well; an icon in the automotive industry, Governor Alvarez; Honorable Constancia Gomez; the TMP (Toyota Motors Philippines) President, Suzuki-san; and of course, a very good friend, the Vice Chairman Mr. Alfred Ty.
Again, good morning everyone. Sa mga kasama natin dito sa TMP, magandang umaga sa ating lahat. Thank and congratulations to Toyota Motors.
Thank you, Toyota Motors, for inviting me today for the ceremonial roll-out of your Vios FMC. As we celebrate the launch of your Vios, I would also like to offer congratulations in advance for your upcoming 30th anniversary.
Today’s roll-out of the Vios FMC serves as a major milestone in the ongoing collaboration between the government and Toyota. This is because the Vios FMC is the enrolled model in the Comprehensive Automotive Resurgence Strategy (CARS) Program, and marks Toyota’s commitment as Participating Car Maker (PCM) in the program.
I’d like to acknowledge the presence of the guys behind the CARS Program, Governor Henry of BOI, Mr. Mulong, and Ms. Concepcion. Please stand to be recognized, so they know who to approach when they’re ready to collect.
With the roll-out of the Vios, we will not only help jumpstart the local automotive industry but also generate more jobs and income opportunities for our countrymen.
The Duterte administration is committed in its support to revitalize the Philippine automotive industry. In this regard, the Department of Trade and Industry (DTI) instituted the CARS program to create more jobs, more income opportunities, and really create a more vibrant SME (Small and Medium Enterpise) community through the localization agenda which is part of the CARS program.
The overall goal of this program is to make the Philippines into a regional automotive manufacturing hub. We can do this by helping the local automotive industry level up against CBUs (or Complete Built Up units) being imported into the country. Currently, the target of the CARS Program is to achieve a 50% localization based on Bill of Materials (BOM) of program-enrolled models.
That level is the minimum. We hope that you can achieve more than 50% localization. Greater localization creates greater opportunities for SME suppliers in the country and it will create more jobs. As you know, our passion in the DTI is really to create higher value adding SMEs in the country.
This program will also augment and enhance policy directions of existing motor vehicle programs to ensure greater innovation, technology transfer, environmental protection, and the development of SMEs. These directions are aligned as well with our goal to grow and develop globally competitive and innovative industries under DTI’s Inclusive, Innovation-led, Industrial Strategy (i³s).
In fact, in Sta. Rosa, Congresswoman, Mayor, we have identified this area as an Inclusive Innovation Hub. That means we will be linking the industry with the academe so that there will be greater interaction between the needs of the industries and allow them to gain access of the research and development facilities of the academe.
In doing that, we are in effect, enhancing the relevance of the research being done in the universities; making sure that their research works will be solutions to industry problems and not just research for research purposes.
The CARS Program is at the heart of our Manufacturing Resurgence Program (MRP). We’re really happy to note that manufacturing has picked up, thanks to you, our partners in the manufacturing sector.
This sector has been leading the way in economic growth, GDP development of 6.8% in the first quarter of this year and 6.7% in the last year. The manufacturing industry grew more than that with an 8% growth, last year and the first quarter of this year. That 8% came from 3-4% in the previous years. That’s the kind of economic growth that we’d like to have, because it’s through manufacturing that we can create more jobs, more decent jobs.
This MRP is really a priority of the Duterte administration. Our President has a soft heart for the ordinary Filipinos. He simply wants the Filipinos lives to be comfortable, to uplift the quality of their lives, making sure that they have jobs, business, and kabuhayan.
That’s why in DTI, we have a straight forward program called TNK—Trabaho (Jobs), Negosyo (Businesses), Kabuhayan (Livelihood). We added another K—Konsyumer (Consumer) to make sure that our products are standard-compliant and prices are very reasonable. So we make sure also that our car prices are very reasonable.
With the support of the 2017 Investment Priorities Plan (IPP), the MRP will close the gaps in industry supply chains, provide access to raw materials, and expand domestic markets and exports for local manufactured products.
The goal of MRP is to enhance the competitiveness of domestic manufacturing industries. When we say enhancing competitiveness, we want to make sure that the raw materials have lower tariff rates than the finished products. That is one assurance that we would like to bring forward.
These industries can then be integrated in higher value-added, ASEAN-based production networks, and global value chains. The program will help us contribute 30% of total value-added and 15% of total employment by 2030. I’m happy to learn that the employment is close to 3,000 people. Palakpakan natin ang Toyota Motor Philippines. Of course if you ask us, we want to see it at the 10,000 level. Para yung mga kaibigan nila, magkaka-trabaho pa dito sa Toyota. In English, so that their friends can also work here in Toyota.
I’d like to reiterate that the government is focusing on Manufacturing to generate jobs not only for skilled workers but also for semi- and low-skilled workers. The target in localization will definitely help with that by promoting SMEs. This program will allow the movement of our workers from the informal to the formal sector, as well as from low value-added activities to high-value added activities.
I understand that the automotive industries are facing challenges. Of course I’m only referring the first six months of this year. For those who were trying to catch up with the tax reform program, more people were buying cars, especially the Fortuners. The Philippines is the largest market for SUVs in the region. The Philippines is also the largest market for Fortuners.
We are facing challenges this year, but definitely, the macroeconomic levels, 106 million Filipinos with an average age of 23 years, lower unemployment rate of 5.5% coming from 6.6%, definitely it spells more sustainable growth in the future. Young Filipinos with higher income, growing middle class can only mean one thing: more car sales in the future. After more spending on eating out, as the economy grows, the next thing is buying cars, the next thing is buying houses.
With such great demographics, we will have a very good run of car sales in the Philippines in the medium-term and in the long-term. It is also projected that our country will have one of the biggest economies—top 20—in less than 20 years.
Our credit rating has even improved. Our credit rating is very important, it tells the interest attached to any loan, not only government loans but even corporate loans. Our rating has improved from stable to positive.
[Gov’t Commitment to the Auto Industry]
We are currently implementing an ongoing review to make the Motor Vehicle Development Program (MVDP) more relevant in today's regional and local market environment—and the program’s incentives more appropriate. We also want to point out that the MVDP 2.0 will incentivize scale in local production based on a technology roadmap that is being developed.
We also hope that the government’s ongoing initiatives will translate to the lateral production of Toyota’s already-dominant models currently imported as CBU.
Of course, we would like to encourage Toyota to be part of the Public Utility Vehicle Modernization Program. We would welcome a different platform, chassis, engine size, and configuration, that is compliant to the PUV modernization program.
Two years down the road, we are now seeing the fruits of all our efforts with the Toyota Vios as one of the first Philippine-made cars to be built under the CARS program.
I am hopeful that with this roll-out, we can envision a future in which our countrymen can enjoy a stable income, secure employment, and a better quality of life thanks to a booming domestic automotive industry.
This is in line with our President’s 10-point Socioeconomic Agenda, where he promised a government that would widen the gains of economic development, to address inequality, and to uplift the quality of life of our countrymen.
That’s why I want to express our appreciation to Toyota for their continued confidence to invest in our country, which serves as testament to the Philippines as a preferred global investment destination. We also value your continued support in helping the government develop the Philippine automotive industry into becoming a regional hub. In fact, my request is to make the Philippines the manufacturing hub of your Vios, not only in the country, but worldwide.
Thank you and mabuhay kayong lahat.
Speech of Secretary Ramon M. Lopez, Franchise Asia Philippines 2018, 18 July 2018
Speech of Secretary Ramon M. Lopez
Franchise Asia Philippines 2018
18 July 2018
Ladies and gentlemen, good afternoon!
So, let me begin by, of course thanking the PFamily that is spelled PFA-mily, for inviting me once again as you know I have been here every year, no absence, I make sure I attend if you invite me. And I make sure that I am always here and avoid foreign trips because we always avoid foreign trips nowadays. And of course, I would like to congratulate the PFA family for really bringing to a higher level the franchise discipline, the franchise community here in the country. And it is now referred to as the “Franchise Hub in Asia”. So a lot of big learnings, [and] every year is always a record to be here, in terms of attendees, and you always call it I think it’s a bigger number of attendees this year. There’s a lot of business matching, networking, and I’m also pleased to know that you have now this Asian Institute of CFE, Certified Franchise Executive. I am very happy to learn that it is really on different level. So congratulations, once again.
Next week, Monday, would be our president’s day for the State of the Nation Address. And definitely, our president would be giving a lot of accomplishment. Some of those have been detailed out in the weekly SONA, in the State of the Nation Address Forum. One of the stories includes inclusivity and shared prosperity for our countrymen and this is really a part of 10-point socio-economic agenda of our president.
And you know, we are happy to always say that your franchising group, or your franchise community is a big partner in this endeavor. Our president, his particular attention is to give support for the franchise, especially the PFA group because you provide investment, you provide jobs for our people and to our president, what is close to his heart is really to uplift the lives of the Filipinos. To make their lives more comfortable and now you do that. Of course there are employment opportunities.
And I guess with that heart, you can say that it’s good to always refresh ourselves with numbers that gives a good scenario for our economy, the state of our economy. In 2017, with 6.7% going into the first quarter of 2018, we sustained that and we have had higher increase of 6.8%. And the different story is now that 6.8% is stacked up by solid sectors. Foremost among these would be sector is the Manufacturing sector that used to be at the 3% growth is now leading with 8%. Services continued to be at the high rate of 6.7% in other words, the one sector, recovers the other sector who will choose to be the running force in the economy which is the service center, and this is where the retail services is part of, continues to show a very good rate. And the other sector, the Agriculture which is used to be in the negative territory, is now in the positive territory, gaining 3.5% last year and 1.5% in the first quarter of this year.
The Philippines, among our peers in Asia, our country’s growth rate makes it the third fastest growing economy after China and India. This confirms with our country’s standing as one of the best performing economies in the region. The IMF (International Monetary Fund) latest world Economic Outlook database noted that our economy is the 39th largest economy in the world, 15th in Asia, and 5th in ASEAN. And as one of the emerging markets, our economy is the 6th richest in Southeast Asia by GDP per capita values. And you see, these per capita numbers are also increasing, suggesting also a growing economy and of course growing little fast to be specific.
With this, really experience a get-to-feel growing economy. We can sense that from all your branches. I am sure many of you growing double digit in the revenues. Tama ba? I heard some of you guys are earning 20% on the revenues. And this also shows that as the economy grows, there are a lot of people picking out. I have been receiving criticisms as I made that statement a couple of days ago. They said that it’s funny that I connect picking out with economy growth but that’s the reality. We go to a more developed economies and you see a lot of people in and out and it was less of this occurrence, in our earlier years when our economy was not growing this fast. And just to back it up with data and that statement is of course, based on some data, the statistics shows if you look at the GDP there is this personal consumption expenditure line and that’s broken down into the different sectors that boxed out the PCE or the personal consumption expenditure. One sector there will be the restaurants and basically the eating out. And it’s been growing the high single digit ranging from 7-10%. The last number showed 8%. So it shows 8% is higher than the overall GDP growth of 6.8%, so it means it is higher than the average growth that we have. It shows that there are more and more people eating out. Those who used to used to on a regular basis eats at home, will find it easier eat in a fast food area. Fast-food restaurant. And those eating the fast-food restaurant will eventually level up, upgrade take up to a maybe a casual dine in, and those in the casual dine-in will probably now be eating in the eat-all you can type restaurants and so on and so forth until they move on to the fine dining, and that’s the reality.
You see, greater number of Filipinos really taking up, even in the goods. You know, the mass rates goods, the FMCG. I was in that industry for the longest time and you can see people also taking up so you have cheaper brands or mass based brands and people taking up to more expensive and more premium brand along the way. So that’s the way it is. That’s the reality. So I guess, the critics should look at the numbers and you know, it will be explained to them that there is basis to these statements.
More on the economic growth, ADB (Asian Development Bank) reported that the Philippines is now experiencing the “Golden Age of Growth”, a period of high and sustained economic growth. They further said our domestic demand and our infrastructure program will fuel growth for the next few years, projecting our economy to grow by 6.8% and even higher than that for 2019.
PricewaterhouseCoopers (PwC) projected that the Philippines will become the 24th biggest economy. So in an earlier report, I mentioned about the number 50 something and now going to about 24th biggest economy in the world by 2030, and the 19th by 2050. So a lot of good indication, in fact, just this afternoon, on the way here, we got the latest rating. And we’ve just been giving us a stable outlook and they retain that stable outlook. So that’s good news. Of course, a few months ago, SMP leveled up our penetrative from stable to positive. And acronym over there is SMP. So that’s not the meaning of SMP, from stable to being positive These are the good indicators that we’re doing the right things, the reforms are there, they are being recognized they are and the good growth. There are some issues I know about inflation but they see this is as temporary issue part of growing economy, that the inflation that we were hitting now is of course trigged by external factors. And no attribution, and if ever, a minimal attribution to the recent reforms we are doing specifically the tax reform, more commonly known as TRAIN.
The positive outlook of our country can also be seen in terms of investments. You know, FDI (Foreign Direct Investments) inflows continue to register good numbers, should we say record numbers. From about 7.9B USD in 2016 to 10.2B USD last year in FDI. Moving into the first quarter of this year, there is also a 43% growth in FDI, that’s foreign direct investment [rather] the actual investment remittance to the country.
For our Board of Investments also, we have set a 50-year record since Board of Investments was established. Last year, we exceed 600B PHP, that’s better. And this year, January to May, we hit 19% growth. And if you look at January to June, I don’t want to specify the report but it is closer to about 28% growth. We are seeing a higher and faster growth for even to January to June of this year.
This growth can be attributed to the country’s sound macroeconomic fundamentals, solid optimism, business confidence, consumer confidence and many other things. And of course, part of this is also attributed to what we call priming activity and this can be seen in Build, Build, Build wherein the government is committed and it is already starting with the infrastructure development program that allocates 5% growing up to 7% of GDP for infrastructure development. And this has never been seen before. We have been under spending in infrastructure. We have been spending only 1-2% in the past decades. And that’s the reason why we have to catch up in terms of investing in infrastructure. And there are 75 infrastructure projects approved in the pipeline and over 35 have been approved and have started the process of bidding. This program will enhance the country’s investment, environment and competitiveness as we build infrastructure in over the logistic costs and of course it can create more employment for those workers that will be part of the Build, Build, Build program. And again, giving them employment will add more Peso in the economy, in the system. And with low rate of this cost. Basically we’re helping in the competitiveness of the country.
Meanwhile, our department with the other agencies, specifically Department of Finance (DOF) as we work on TRAIN 2. And to us, the tax reform part two is also an important ingredient in this tax reform. Never have you seen DTI and DOF working closely in the past administration and every time, they talk about incentives. One thing I must clear with all of you is that the tax reform part two that we are having does not talk about the removing the fiscal incentives for those that are in different areas of activity. That’s the reason why DTI has been supporting this. In fact, the incentives will be enhanced from what is limited to an income tax holiday incentive, there will be other incentives more relevant to many start-up sectors or start-up businesses that will be registered. It will now include even accelerated differentiation, will include net loss carrying over or even double deduction on your currently and daily expense. All of these incentives can be enjoyed by firms that were pre-registered.
Of course, part of this, is also counting the number of years that wanted to be on incentives. We basically rationalize what is now being given as perpetual settle incentives like corporate tax rate. For example, in the Philippine eco-zones registered in PEZA, but no other countries given in any way the perpetual incentives. There has to be rules and we have agreed with that principle. Being economies by training, it makes sense to have all these limited number of incentive. Because of the other side of the picture, as you rationalize the incentive, more sectors, more companies will enjoy because those are registered will now enjoy lowering of the corporate income tax rate. ‘yun ng kapalit po noon. Rationalize this part so we can have general lowering. There is much companies in that side defense. From 30%, the tax rate for corporation will now make a bigger account to 25%. There is always a trade off, but it’s more of leveling the trade, and making incentives more relevant with more performance-based time count and focus. The law will make sure business support mechanisms will be definitely more performance-based, and will benefit companies that are really putting in more investments and creating more jobs. Instead of a continuing set of incentives even though the companies are no longer in the investing or adding employment, that is the rationalization being done.
Let me now go on to another development that will benefit your sector and that is with reference of the Ease of Doing Business (EODB). Recently, the president signed Republic Act 11032 that assures and works on Ease of Doing Business. The highlights of this will be in all your transactions in the government. In applications, permits, anything that would be in line with the fault line services of government can now be a limited passing number of processing time. Three days for simple transactions, seven days for complex and 20 days for highly technical transactions. So if you have experiencing problems in getting permits whether at the national government agency or typically will experience that also in LGUs (Local Government) getting Mayor’s permit and other permits. I guess those days are quote-unquote numbered. And they are numbered also because in this law, it is a harsh law actually. It is a two-strike policy. The first strike the first offense there will be a six-month suspension of the employee’s concern. The second offense is termination, forfeiture of benefits, penalty or fine of 1-6M PHP and six months of imprisonment. It is a criminal act. So it is really a difficult law or a harsh law. Of course, we kid around,baka wala nalang matirang trabahador sa gobyerno or marami nang mag-resign. O baka first offense, ‘mag-resign na ako baka ma-hit ko ‘yung second offense’’. But that’s really a challenging and difficult law but it is written to install disciple into the system. That act covers having a Citizen’s Charter wherein all the requirements will now be listed. So that the government agency cannot tell you after submitting all the requirements, ‘eh, you still lack of one requirement. You need another document. Submit this’ and everytime you back and another document lacking. They will keep you coming back and of course, in the end, maybe they are just waiting form of corruption. That is the difficult part. Now it will be listed in the website of the Citizen’s Charter, all the documents will be there and there will be no reason for the office, the government office to reject your application. In other words, they have to accept that and process it within the prescribed number of days. Hindi na pwede yung pag-submit mo, may kulang pa rin pababalikin ka, may kulang pa pababalikin ka.
So, the IRR is now being drafted by, I think October [because] that’s 90 days since signing. The IRR will be finished and the concentrations are now being undertaken. Then today, is just the beginning. Basically, they want to see a one form type of application so what we are doing now is making an inventory and put out of all forms needed by SCC, BIR, the mayor’s permit, the construction permit and hopefully, will do that in one form. Submit that, fill it out online, submit it, and in a few minutes you get assessed, you pay via PayPal or PayMaya or whatever payment system and you get to print the business permit. Just give us a few months, hopefully before the end of the Duterte Administration I will promise you that this is something that we will deliver, an online registration system that will give you the processing within minutes. And we are now actually having a design, actually a design workshop. It’s like in the business sector, we have the zero case budgeting assuming there is no form to fill out. If you will give me a form that will just list down all the information field you could give and that settled information field is the one will be needed by these different offices. Fill it out, be accessed, pay and then approve. That’s the ultimate goal. That’s the new mindset that we are seeing. To talk about mindset, that is the mindset we are receiving also as in the EODB. It has to be a leaping type of mindset that will allow us from where we are now to hopefully the top 20% in the competitiveness index because our source has been improving yearly. Even last year, we have improved our score. But the other countries improved much more that is the reason why our dropped last year. So everybody’s improving. We have to improve much faster than them that is why we have to leap forward. And by leaping we have to infuse it in your system.
Just a government direction, in terms of industry development, in summary, we were working also on Inclusive, Innovative, Industrialization Strategy or the I3 Strategy. It is only just ensuring that the industry sectors, including the franchise community which I know you are already into, because without innovation, you will never survive or even grow. Inclusive innovation, industrialization strategy is the one we must give into. And part of the ensuring an I3 Strategy, is indication of our industries will be competitive. And I must also tell you that there are policies that would affect competitiveness of industries. One is foreign exchange. I’ve often mentioned that foreign exchanged is schemed to building a big production base. A production base that will also lead us to a net exporting base, a net exporting country by having market based foreign exchange. It is important if the currencies are deprecating, don’t think of it really is a bad thing. It is really benefitting our economy because exports will be promoted if you protect the local, domestic industry, we will protect the manufacturing industry because the foreign exchange will be a natural protection to all the imports that are coming in. it will promote local manufacturing and build more export production base for us to be net exporter in the future. And for all of us, for you in the retail industry, it will prime out also the domestic economy, our OFW brothers and sisters will now have more Pesos for every dollar that they earn and even in the IDBP sector, and many other sectors that are dollar rating so there will be more money in the system and it will definitely prime the consumption steadily. Having a competitiveness exchange rate is not that bad. It is actually benefitting our country.
The other thing is that we also make sure, especially for you in the operations of retailing, as well as in the manufacturing, that your inputs, they are always be competitive in pricing so that you will also be competitive. And what do we mean by that? For example for inputs like sugar. And then we go into that particular item because has been increasing in prices nowadays and it is because the sugar production is not in very good this year and the bottom-line, you can see it also in the prices. The prices of sugar, locally, have been reaching 3,000 pesos per 50 kilogram pan. In the world market price, is less than half of that. Lumaki ‘yung gap. About 1,300 to 2,400, so all those manufacturing sugar user in the sector are at a disadvantage right now. So, what is the solution? The solution is to allow importation and the good thing is that the Department of Agriculture has actually allowed the importation of sugar. That is the good news. But the bad news of course is it has been limited to the sector, the planters, the miners, the takers. And why should it be limited in this sector? Why don’t we allow the sugar using industry to import their requirements so they could benefit from the lower cost input? So that their industry will be more competitive? So that’s an issue. And at the end of the today, if you add in all of these costs, additional fees on any sugar in partition, when it guess to the retail, even to the supermarkets, or to the palengke, ang mahal na ng sugar. You get sugar from 50 pesos close to 60 pesos or even more 65 esos per kilo. That is also a reason why some of the basic commodities, like sugar, prices have been really going up. So it is not good for the consumers, it is not good the manufacturing industry.
Let me go on to another issue. This is not an issue, but this time, is an opportunity. I’ve mentioned in my earlier talk I think it’s in the PRA or Philippine Retail about the opportunities in Halal. I understand some of the franchisors and brand owners are now opening up in other countries in Brunei, Malaysia, and other countries predominantly Muslims, Indonesia also. So in Halal industry, there is a huge opportunity there and we encourage you to top that market. and the good thing is that Halal opportunity really offers tremendous market size of 3.2T dollars and even locally, assuming a one percent of that world market size is just about 30M dollars so it is also huge number for the country alone. And this is not limited to food. It also covers personal care, cosmetics, also covers I think even clothes and even restaurants, hotels, resorts, and we need opportunities there. If we have those in our system, in our economy, we can imagine an influx of more tourists who are Muslims who really wanted to go to the Philippines but their problem is there are no restaurants to go to. Wala pa silang mapuntahang restaurant or resort or there are, konti lang. it’s just a few of them so it will be very important for us to look into this market. To build our Halal capability so that we can eventually also export and be part of a very big Halal market. And good thing with Halal, it has positive attributes attached to it. It is considered as a way of life it should be highly attached to a religion so we imply this positive. It’s pure, it’s clean. It’s permissive. Those are positive attributes attachment of Halal. Even Singapore that is not a Muslim dominated country, and I remember our special traders by then who is here but now based in China, brought a huge deal account grocery, a supermarket that selling only Halal. And Singapore is only about 10% of their population who are Muslims and yet they’re making it as a selling proposition already, a positioning for some retailers. We recognize also the potential in Halal.
Moving on, population and inflation, our country’s investment situation is also a perfect match with our country’s young population with average age of 23.1 years old. And now with lower unemployment rate from 6.6% to 5.5%, you can expect that for many more years, we will have sustainable growth in our consumer base. So again this is a positive indicator for our retailing and franchising group. I mentioned earlier the kind of growth we are having and in a way of happening with the lowering of tax rate for personal income tax, the increase in the number of Filipinos that will be covered by the exemption and therefore they will now have a higher take home. There is about I think 12M pesos added into the system. With the salaries from workers who are in the Build, Build, Build, with the savings from pre-education and tertiary education, health benefits and all that in total, the estimate is about 32B pesos added into the system per month. So imagine that this is really happening and to the certain extent somehow driving out the prices also. And that’s the reason why despite there is a 5.2% inflation rate, the latest SWS survey shows that the Filipinos, in general, are feeling extra rich, in other words, they have more money in their pockets or maybe in the statement there they feel less poor. Because I think that is the reason because they have more money in their pockets. I know this might attract more criticisms after this talk but that is the result of the survey. Don’t blame me. The higher take home pay will make one a bit richer. The estimate is if you have one month extra every year, it’s like a one month bonus every year. That’s the kind of tax saving you’re getting under the TRAIN 1. So higher take home pay. If you’re earning 50,000 per month, you have 50,000 extra income for a year because of savings. You earn 21,000 the same. 21,000 for the year.
And then let me just go to the MSME development just to highlight the point that the franchising group has been a partner in Micro SME development in entrepreneurship development. For so many years, we appreciate your vital role in Micro SME development and thank you for that. And many of you are mentoring, many of you are being mentors in the DTI program, SME teaching and seminars nationwide. Together with our other partners sa Go! Negosyo, Philippine Marketing Association, dahil po doon maraming salamat sa inyong pagtulong sa amin and as you know we now have about 890 negosyo centers and please fill out more the negosyo centers with mentors. Maraming tayong pwede gawing place nationwide. It’s almost one for every two municipalities already. And that number keeps on growing.
So in ASEAN region, Philippines has shown, it’s the best destination for international franchises with the latest number of 2,000 brands and about 200,000 franchise units as noted by the recent International Franchise Association Convention. The country ranks 7 and 8 globally in terms of the number of franchise brands and franchise units. So congratulations. Kayo ang “Franchise Hub of Asia”.
Our local brands have also crossed borders, and maybe even more with 20 brands penetrating Southeast Asia, Middle East, and North America. That’s why we like to thank everyone here today for their continued support in making the Philippines the “Franchise Hub of Asia” and actually we have here, I see in the room a lot of our commercial attachés consider DTI as your partner in bringing your brands abroad. Actually, prior to this convention, I think late last year when we have the planning, I could pass our team, Foreign Trade Service the commercial attachés and Special Trade Representative to mainstream Philippine brands. A lot of business development activities are happening. They contract many meetings but and today we want to measure that in terms of the number of brands that have been mainstreamed whether these are manufactured goods, so the local Philippine brands that would be in the grocery shelves or franchise Filipino brands that would definitely be in the mainstream market. Everytime we go to these countries, we are very happy to see PH brands in the malls or everywhere in the mainstream market in those countries. And what do I do everytime I see them? I take a selfie and I show and send it to you. I am sure many of you are doing that and I am proud to see Philippine brands abroad. So palakpakan natin ang mga Filipino brands that are reaching the world market.
Our foreign trade service will be your teammates. And everytime we were in abroad and would like to meet companies, franchisees that will be your potential partners abroad. Please make use of them. We will continue to do more investment roadshows inviting you to join us. I think September we have a plan to go London so that we can meet the investor community but at the same time we would like to invite you to join us present opportunities that you can offer them as well as meeting also the Filipino community there and the opportunities that you can offer to the Filipino community. Many of them I’m sure would like to assure to have their own businesses back home, either through their relatives or in preparation for their eventual return to the country. So we would like you to join us in London.
So let me conclude by saying that of course now is the perfect time to invest in the PH it is always perfect more today than yesterday. Diba parang kanta. Not as much as tomorrow. So, I’m sure our President, is your greatest supporter for two reasons: number one, for his better half, to Madame Honeylet Avaceña who owns many franchises and I know si Madame has been helping her as well and her team. Even before bago pa naging President si boss. And the second reason is again, was mentioned earlier, the franchises, your franchises create jobs that alleviate our need and make life more comfortable for the Filipinos. So, with that, we encourage you to join us in the nation building and just always stay with us as we bring the Philippines to become economic partner of the world.
Maraming salamat po at magandang gabi sa inyong lahat.
Speech of Secretary Ramon M. Lopez, Marawi Entrepreneurs' Forum & Job Fair, 16 July 2018
Marawi Entrepreneurs’ Forum & Job Fair
16 July 2018, Mindanao State University, Marawi City
Ito ay para lang masigurado na ang umuutang ay nagnenegosyo at may pambayad. Hindi naman po pwedeng magpapautang lang ang gobyerno na hindi sigurado sa pagbibigyan.
Meron din po tayong pautang para mga pamilya ng mga kasundaluhang wounded- or killed-in-action (WIA/KIA). Dahil sila rin po ay naapektuhan ng giyera sa Marawi.
20 karinderia starter kits
76 sari-sari store kits
20 carpentry tools
20 electrician tools
20 Maranao delicacies starter kits
20 street food business starter kits
11 bongo trucks
5 mobile rice mills
Keynote Speech of Secretary Ramon M. Lopez, National MSME Summit 2018 (10 July 2018)
Speech of Secretary Ramon M. Lopez, Launch of Go Lokal! Souvenir Collection (4 July 2018)
Speech of Secretary Ramon M. Lopez
The launch of Go Lokal! Souvenir Collection
4 July 2018, DTI Main Building, Makati
“DTI Go Lokal!: Supporting Young Makers and Artists”
Good Afternoon, everyone. It is another exciting afternoon for the Go Lokal! project. First of all, I would like to thank all of you, I’m pleasantly surprised to see you here and I really appreciate your presence.
Go Lokal! really started with a simple vision: to mainstream the Micro Small and Medium Enterprise (MSME) products.
Every time MSMEs want to enter a mainstream market (malls), they have to pay a listing fee of two to three million pesos, or rent space. But with Go Lokal!, in cooperation with many of the retailers here in the country, we do our share in helping the MSMEs gain free access to the mainstream market.
The beauty of this is that they get to be discovered in Go Lokal! stores. And when people [from these] bigger companies, discover that, “Oh, you’re a part of Go Lokal!? Then I will waive my listing fee.” They can now enter the mainstream market, and it will bring no cost if any, a very minimal cost for Micro SMEs.
This really promotes and encourages more and more MSMEs because the incentive for improving their products is they gain access here. So this really promotes and incentivizes MSMEs to continuously innovate on their products.
The good news here is that our Go Lokal! store started from one in Robinsons to around 50 now with 315 MSME suppliers, 81 MSMEs mainstreamed, and 600 products in malls and supermarkets. Ganoon na kadami, and we just started middle or late last year.
We are very happy that we have come this far and hopefully this is just the beginning. Ibig sabihin ng beginning, nowhere to go but up. We expect this to really go up.
We will also be in Kiss and Fly in NAIA 3, that will be launched this month, July 19. Ang daming development. We are in PAL Mabuhay Miles Magazine, we now have LED billboards along EDSA, in partnership with MMDA, we are covered by Philippine Star, Inquirer, some magazines as well.
But, you know, this project is not really for us. It is really for the MSMEs. And this is really the priority sector of our President Duterte. This is our way to really make sure that we always uphold inclusive growth. And by empowering MSMEs, you empower the nation.
They’re not just simple MSMEs now, they are more empowered, smarter entrepreneurs with products that have better design and packaging. These will become higher value products. And that is changing their lives. We want the micro to become small, small to become medium, and eventually the large. That’s the overall concept.
For all those participants and suppliers of Go Lokal!, I know that next challenge is when they get to discover the people order or the buyers will order in volume. So the next challenge is “Oh, support na. Wala na kaming pang-increase ng production.”
Now don’t worry, because we have the Pondo sa Pagbabago at Pag-asenso we have the financing source for you. What we are working now is expanding their operation using Pondo sa Pag-babago at Pag-asenso—that’s President Duterte’s idea to battle and replace the 5-6.
You don’t have to borrow from 5-6 and the nicer story also is if you get bigger, and you borrow bigger amount, higher than 200,000 pesos, we can let our SB Corporation lend to you directly. So you are categorized as a medium scale producer and you will get access into lower interest rate fund.
Hindi na s’ya microfinancing rate. Kasi microfinancing rate, they are still in 20% per annum. Kasi ano ‘yan, higher operating cost, and a lot of people to disperse and collect, so 20% is a typical interest but if you’re in that medium-sized loan already, you can get it at about 7 or 8% per annum.
All of these are per annum; compare it to 20% per day or 20% per month of the 5-6. In the DTI, we try to provide the 360-degree support in market access, finance, equipment, training, and many more.
So, once again, thank you for joining us. This is hopefully our way to really keep better chances to our Micro SMEs up their lives and to become more prosperous Filipinos and as our President says, more comfortable life for all of you. Salamat po.
Speech of Secretary Ramon M. Lopez, Philippine Retailers Association General Membership Meeting (28 June 2018)
Welcome Remarks of Secretary Ramon M. Lopez, US-ASEAN BUSINESS COUNCIL SME WORKSHOP (27 June 2018, Philippine Trade Training Center)
Welcome Remarks of Secretary Ramon M. Lopez
US-ASEAN BUSINESS COUNCIL SME WORKSHOP
27 June 2018, Philippine Trade Training Center
“Empowering Philippine SMEs with Digital Tools and Mentorship Opportunities”
First to our Ambassador Sung Kim of the U.S. Government, our partner in SME development, PCCI President Alegria S. Limjoco, Senior Representative of the US-ABC, Elizabeth Magsaysay, Mr. Surendran Vangadasalma of Cisco, and our partners from the government, a gracious welcome to all of you.
Ladies and gentlemen, it’s my pleasure to be with you this morning. Today, we celebrate the International Day for Micro, Small, and Medium Enterprises (MSMEs). This is in support of the United Nations (UN) General Assembly resolution recognizing the crucial role that MSMEs play in achieving the 2030 Agenda for Sustainable Development.
Empowering PH MSMEs
Last year, the Philippines’ MSME Development Council also acknowledged the UN designating June 27 of each year as “Micro, Small and Medium Enterprises’ Day.” This resolution highlights the importance of MSMEs as the cornerstone of economic growth and development of the country.
Here in the Philippines, we pay special attention to MSMEs. This is a sector close to my heart and the heart of President Rodrigo Roa Duterte. He has given us the mandate to cater to the needs of the Micro SME sector. He has given us a lot of support in terms of budget, manpower, resources, etc.
Another achievement on SMEs: This year we have decided to convert the Philippine Trade Training Center, an attached agency of the Department of Trade and Industry, into an MSME Academy. The PTTC was originally created for Philippine exporters—for them to level up. By transforming this into an SME Academy, we are preparing MSMEs to become part of, first the local value chain, and eventually the global value chain.
MSMEs account for 99.6 percent of the total number of businesses in the country, while also employing 62.8 percent of the total workforce. The challenge has always been, the value adding part—they account for only about 36.5% of GDP. The answer, of course, is in the capacity of the MSMEs. The drive for us is to help them become smarter entrepreneurs who will contribute a higher value added to the economy. If we’re talking of inclusive growth, we have to empower the MSMEs or those at the bottom of the pyramid. We want the micro to become small, the small to become medium, and the medium to become large enterprises. In developed countries, the MSMEs account for 50 – 55% of the GDP. That is our target.
To this effect, we must continue to effectively empower these main drivers of national development by ensuring that in today’s changing landscape, no one will be left behind—especially under President Rodrigo Duterte’s administration.
It can be hard to keep up with the rapid developments in the 21st century, especially with the changes arising from the 4th Industrial Revolution. But with the Internet of Things, MSMEs have the potential to gain from the digital revolution with technology acting as enablers to help them hurdle market barriers towards growth and expansion. Technology is the great equalizer. We want MSMEs to have access to more information on market trends, designs of products, business models, etc.
Taking advantage of the ASEAN Economic Community, the Philippines must embrace the digital economy and the innovation processes. It’s also imperative for our MSMEs to connect to overseas market, compete worldwide, and be connected to regional and global value chains.
Fortunately, there is a multiplicity of digital platforms that can hasten enterprise owners to reach buyers of its goods and services online. Aside from this, we are also talking of online mentoring. We already have mentoring programs, we just need to take them online so they can train more MSMEs. We want to give them access to mentoring 24/7.
We have 883 Negosyo Centers nationwide. Anyone can go to these centers and ask the business counselor about our microfinancing solution, the Pondo sa Pagbabago at Pag-asenso or P3. This is our program to replace the 5-6 lenders.
Increasing MSME connectivity
Public-private initiatives have already begun to support MSMEs in this area. Early this year, the Department of Trade and Industry (DTI) partnered with Google Philippines and IPG Mediabrands Philippines, Inc. to increase MSMEs’ presence on digital platforms. This effort will make them more dynamic and competitive: for example, Google My Business can enhance the online visibility and accessibility of MSMEs to potential customers.
We also teamed up with PLDT Enterprise for an event teaching entrepreneurs about digital tools like PLDT’s PayMaya, a prepaid online payment application that permits customers to pay online without a credit card.
Across the Asia-Pacific region, the Philippines is likewise one of the proponents of the B2B online platform, the APEC MSME Marketplace. It is a great trade opportunity in the trend of the digital economy that addresses issues of doing business beyond our borders using the internet.
However, the increase of connectivity through digitalization compels businesses to build capacity and engender innovation. This is important to consider as they begin catering to buyers with higher requirements, and markets with higher product standards.
To facilitate MSMEs capturing this digital opportunity, we need to make smarter entrepreneurs. The programs that we outlined for MSMEs cover the 7Ms of entrepreneurship: Mindset, Mastery, Mentoring, Money, Machines, Market Access, and Models of Negosyo.
We provide market access not only for three-day trade fairs. We set up Go Lokal! stores for MSMEs to have free access to mainstream markets—these are the malls. We only accept MSMEs with beautiful products, so this becomes a challenge for them to deserve to be displayed and be discovered in the Go Lokal! stores. Otherwise, an MSME in this country would have to pay around PHP 2 million just to be displayed in the groceries.
This 7Ms approach is our 360-degree intervention for MSME development.
The ASEAN SME Academy
The ASEAN SME Academy, which is also highlighted today, is an online platform that provides business information and training resources to Southeast Asian MSMEs and utilizes Mastery and Mentoring strategies.
The Academy’s ceremonial handover occurred last year in Luang Prabang, Lao PDR, between the US-ASEAN Connectivity through Trade and Investment (or US-ACTI), and the ASEAN Coordinating Committee on MSME through the Philippines.
The Academy plays an important role in the realization of the Plan’s strategic goal on enhanced management and labor capacities. As of May 2018, it was recorded that 31% (or 1,058) of the total number of active users (3,340) of the Academy are Philippine enterprises. Two of the five most popular courses are on online tools such as “Boost Your Business with Facebook” and “Social Media Marketing.”
It’s not surprising that the entrepreneurship ecosystem calls for new business models. Reinforced by the 4thIndustrial Revolution, MSMEs cannot strive for more of the same. That’s why this year’s National MSME Summit with the theme “Accelerating 7Ms for Developing MSMEs 4.0” will emphasize these issues. This will ensure that MSMEs will be connected and not mere observers during this transition.
Let me take this opportunity to invite all of you to on July 10 at Clark for the National MSME Summit. Director Jerry Clavesillas will make a detailed announcement regarding this. So far, we have President Duterte attending the afternoon session.
Today, I call on the audience to prepare to be challenged, inspired, and empowered. MSMEs should also be mindful that there are corresponding responsibilities in using digital tools, as well as going digital.
Lastly, I wish you a most fruitful day as we exchange knowledge on fostering MSME competitiveness through mentorship and equipping you with appropriate digital tools. Let us remember that our efforts are aimed for the greater good of creating inclusive growth and shared prosperity for all our countrymen.
Thank you and mabuhay kayong lahat!
Opening Statement of Secretary Ramon M. Lopez on TRAIN Package 2
Message of Secretary Ramon M. Lopez, DBP and DTI Memorandum of Agreement Signing (14 June 2018, DBP, Makati City)
Speech of Secretary Ramon M. Lopez, 2018 EODB Report to the People at the 6th Ease of Doing Business Summit (13 June 2018, Philippine International Convention Center, Pasay City)
Speech of Secretary Ramon M. Lopez, 2018 Philippine Semiconductor and Electronics Convention and Exhibition (13 June 2018, SMX Convention Center, Pasay City)
MESSAGE OF SECRETARY RAMON M. LOPEZ
2018 PHILIPPINE SEMICONDUCTOR AND ELECTRONICS
CONVENTION AND EXHIBITION
13 June 2018, SMX Convention Center, Pasay City
Our good Secretary Boy dela Peña will be speaking in behalf of the President and will be delivering the keynote. So I told myself that I will be limiting myself to expressing our deepest gratitude and thanks to the SEIPI group—the semiconductors and electronics industry, which as we know is a big driver of the economy.
A big thank you for really helping us develop the PATHS, the Product and Technology Holistic Strategy, which is really the industry roadmap. We are really interested in working the out, of course with SEIPI (Semiconductor and Electronics Industries of the Philippines, Foundation, Inc) and the authority among all the Cabinets, the Department of Science and Technology (DOST). We’re fortunate to have with us Secretary dela Peña who has helped us a lot in the roadmap.
As we know, your industry accounts for a significant contribution to our economy. On exports, you account for 50% and you still do. And you still are performing above par and it’s good that that over 50% performs positively to the tune of 5 – 6%, I think, the latest figure.
I know that you can grow more, with the new products that you develop, higher value, new designs, market-driven products that you will be churning out from your group.
On the GDP, I understand that you also account for more than 10%--especially on that manufacturing sector, which is really a good story to tell nowadays, as we experience that 6.8-6.9% GDP growth.
We are all bragging about the fast growth of manufacturing leading the way at 8% growth rate—which is quite above average and a really far cry from what we are hitting two or three years ago, at a level of above 3%.
Your sector accounts for about 3 million in terms of employment. As you know President Duterte’s administration is not only about projecting and promoting innovative and inclusive industries, it’s really about creating jobs: jobs that will uplift the lives of our countrymen, jobs that will eradicate poverty.
We really bank on this sector because you are the future. You are helping us in the past, but you are still the future because you are the source of these new innovations and technology.
Again I would like to thank SEIPI and DOST for the completion of the PATHS project. Also thanks to the DOST PCIERD for their support in the completion of the PATHS project
The PATHS will steer the technological direction of the Philippine industry towards becoming an innovation-led industry, which is also strategy of the Department of Trade and Industry.
This project was funded by DTI-BOI amounting to Php 2.85 million and implemented by DOST-PCIEERD through SEIPI
Our long term vision is for the industry to generate US$ 5 billion investments, US$ 50 billion exports, and 13.5 million direct and indirect employment.
The PATHS will identify emerging products and technology in the next five years and identify the right conditions to create an environment conducive to the transfer of new technologies to the Philippines, the shift to higher-value manufacturing, and optimum socio-economic environment to sustain growth of the industry.
This is where we really would like to work closely with your sector. I know that there are a lot of concerns. But we really want to provide you with the right policy and industry reforms that will really prepare us for a better future and a faster growth for the industry.
We have to work closely in generating ideas for policy and program support that you will need in the industry.
The DTI and the DOST is also working towards the Inclusive Innovation Centers. We are tying up with experts and partners from technology and R&D institutions, universities, and corporations. This is something Seretary dela Peña may be mentioning.
This effort will really help us product development, design, high-performance chips, and semiconductor products that will really have high market potential.
Again your government, under President Duterte of course, will help in implementing this roadmap, to help us create a better macroeconomic and industry environment for your sector.
Thank you once again. Good Morning. I’m sorry, I’ll be running in a while for the Ease of Doing Business Summit that is scheduled before 10 am this morning. We are basically running that program. So thank you once again.♦
Speech of Secretary Ramon M. Lopez, Launch of China International Import Expo (CIIE) (15 March 2018, Fairmont Hotel, Makati City)
SPEECH OF SECRETARY RAMON M. LOPEZ
LAUNCH OF CHINA INTERNATIONAL IMPORT EXPO (CIIE)
15 March 2018, Fairmont Hotel, Makati City
Ladies and gentlemen, good morning!
I would like to thank to the People’s Republic of China, the Bank of China, Alibaba, and the Philippine Chamber of Commerce and Industry (PCCI) for organizing today’s launch of the China International Import Export Expo (or CIIE) information mission.
Likewise, thank you for giving me an opportunity to speak here today on how the CIIE can not only help boost Philippine-China trade, but also deepen the two countries’ trade relationship as well.
CH International Trade
Today’s event is actually the first leg of the CIIE information mission—entitled “Your Gateway to the China Market”’—and this is also expected to visit the cities of Cebu and Davao on March 20 and 23, respectively.
To be held on November 5-10 this year in Shanghai, China, the CIIE is a major international event that reiterates China’s strong support for trade liberalization, as well as their way to actively open the Chinese market to the world.
Because of this, the expo is the only trade show in China to date that will feature foreign exhibitors—and no China companies—on the exhibit floor. However, there will be Chinese buyers present, as well as buyers from all over the world at the event.
- At the CIIE, the focus will mainly be on importation of goods and services to China, with the 6 exhibitions areas featuring trade in goods. These include: High-end Intelligent Equipment; Consumer Electronics & Appliances; Automobile; Apparel, Accessories & Consumer Goods; Food & Agricultural Products; Medical Equipment & Medical Care Products.
- There will also be a section for trade in services comprising Tourism Services, Emerging Technologies, Culture & Education, Creative Design, and Service Outsourcing.
For the Philippines, the CIIE will be the biggest ever overseas trade fair that our country will participate in, with over 100 Philippine product and service exporters, as well as investors and government representatives attending the event.
PH-CH Trade Engagements
The participation of Philippine companies in CIIE marks another step in the growth story of the Philippine-China trade and investment relations, as well as the continuing benefits of President Rodrigo Duterte’s independent foreign policy.
From President Duterte’s 2016 state visit to China to the convening of the Philippines-China Joint Commission on Economic and Trade Cooperation (JCETC) last year, we have constantly sought to widen our trade engagements with China.
- For example, there is China’s support for infrastructure priority projects like the Chico River Pump Irrigation project, as well as the assistance for earthquake-stricken Surigao worth US$ 1B and the purchase agreement of US$1.7B-worth of agricultural products.
- We likewise saw several Letters of Intent (LOI) signed last year for potential private sector investment that would result in an estimated US$10.4B-worth of investment and some 11,500 new jobs for Filipinos.
- There was also the Philippines-China SME Cross-Border Business Matching held last March 2017 that generated a total of 635 matches between Filipino and Chinese enterprises.
Thanks to these efforts, we are now building on the progress that we’ve achieved, even as Filipino businesses take advantage of the opportunities in working with their Chinese counterparts.
PH-CH Bilateral Trade
That’s why it’s no surprise that as of 2017, China was our top trading partner with a total bilateral trade valued at US$ 23.82B billion, and they’ve also become our 4th biggest export market and our top import source.
- Our exports to China last year included: storage units (US$ 1.26B); digital monolithic integrated circuits (US$ 1.12B); nickel ores and concentrates (US$ 494.35M); semiconductor devices (US$ 329.74M); and coal (US$ 296.14M).
- In fact, our total exports to China increased by 9.73% due to the increase in the exports of digital monolithic integrated circuits (68.89%), and cathodes and sections of cathodes of refined copper (566.87%).
- Meanwhile, Philippine imports from China grew by 8.14%. These include: petroleum oils and oils obtained from bituminous minerals (64.66%); parts and accessories of automatic data processing machines (126.62%); and materials, accessories, and supplies for the manufacture of electrical and electronic machinery, equipment and parts (112.30%), among others.
CH Market Opportunities
But even with our current trade engagements, the opportunities for trade between Philippines and China can be so much greater.
In 2017, China's total external trade reached US$ 4.1045T with China’s exports and imports increasing by 7.9% and 15.9% (in terms of US dollars), respectively. This has resulted in a trade surplus of US$422.5B for China.
- China’s population in 2017 is almost 1.4B, with an increase of almost 125M since 2000. With China rapidly urbanizing, more than half of all Chinese today live in urban areas and up to 70% are expected to be urbanites by 2030. This is an massive increase from the less than 20% of China’s population as recently as of 1980.
- We’d also like to note that China is ageing at a rapid pace. In 2017, the median age was 37.9 years—7.6 years greater than the figure for 2000—and it will be 41.9 years by 2030, or well above the regional average.
- Lastly, I ask our Filipino friends and partners from the private sector to note that it’s impossible to ignore the huge US$ 10T Chinese market due to their rapid growth of consumption and imports. Accessing this market will surely leap frog the level of business transactions between the Philippines and China.
While we all know that China continues to play an important and influential role in the global economy, we foresee even greater opportunities to drive the level of Philippine-China transactions higher with trade events like the CIIE.
In closing, I would like to reiterate how the CIIE can serve as an important opportunity to showcase the trade capabilities of the Philippines, as well as investment opportunities available between our two countries.
At the same time, while this trade event will give our Filipino businesses access to the huge China market, it will certainly help deepen the bilateral trade relations between the Philippines and China.
More importantly, this engagement shows how warm relations are between our two countries—a vast improvement from the past years—and underlines the strong ties of friendship between the Philippines and our good friend and neighbor, China.
That’s why the Philippine government—and specifically, the Department of Trade and Industry (DTI)—remains committed to fortifying and supporting this relationship through the appropriate combination of policy, trade, and investment decisions.
We also hope that China will continue partnering with us to help push President Duterte’s socio-economic agenda to create inclusive growth and shared prosperity, from promoting MSME development to supporting our “Build, Build, Build” infrastructure program.
I am confident that with the solid friendship between the Philippines and China, our two countries can better manage today’s political and economic challenges—even as we benefit from the increased access in trade and investment with each other.
Thank you very much and mabuhay!♦
Press Statement of Secretary Ramon M. Lopez, DTI-DICT-NTC JMC Signing on Prepaid Loads (20 December 2017, DTI International Building, Makati City)
PRESS STATEMENT OF SECRETARY RAMON M. LOPEZ
DTI-DICT-NTC JMC SIGNING ON PREPAID LOADS
20 December 2017, DTI International Building, Makati City
The national government is committed in ensuring all Filipinos enjoy the benefits of sound telecommunications services in the country, while also protecting their consumer rights.
As such, the departments of Trade and Industry (DTI) and Information and Communications Technology (DICT), together with the National Telecommunications Commission (NTC), are signing a Joint Memorandum Circular (JMC) to support these efforts.
With this JMC, the government is amending NTC’s Memorandum Circular No. 03-07-2009, or the Guidelines on Prepaid Loads that cover all prepaid loads of Information and Communications Technology (ICT) providers and public telecommunications entities.
Specifically, prepaid loads of whatever amount will now have an expiration date that will last up to one year from the date of the top-up. This, in turn, will afford subscribers more time to use their prepaid loads.
- The only exclusion to the coverage of this JMC will be those prepaid loads purchased for promotions and other services with a specific period of use, as approved by DTI and NTC.
With this circular, the three government agencies can better protect the rights of Filipinos as consumers given that as of end December 2016, there are around 130 million cellphone subscribers.
- This is higher than it was in 2009 when the number of subscribers was 75.57 million and the carrying cost per subscriber was Php3.00 per day.
- Taking into consideration that more than 90% of the costs of the networks are fixed, the carrying cost per subscriber has decreased as the number of subscribers has increased since then.
To reiterate, the 1987 Constitution recognizes the vital role of communication and information in nation-building. As part of a whole-of-government approach, different agencies have their roles to play to fulfill this goal.
- NTC promotes consumer welfare by facilitating access to telecommunications services via a sound infrastructure and network,
- Meanwhile, DICT pushes the development and use of ICT through policies, plans, programs, and guidelines.
DTI’s mandate—under Republic Act No. 7394, or the Consumer Act of the Philippines—is to protect consumers against deceptive, unfair and unconscionable sales acts or practices, and from misleading advertisements and fraudulent sales promotions.
Furthermore, while DTI is committed in promoting the rights of consumers and the needs of the individual subscribers, we also want to address the needs of business subscribers using these services.
- DTI is confident that our Micro, Small, and Medium Enterprises (MSMEs) will be able to do business more easily thanks to this circular, whether by making calls or sending an SMS to their customers, or by accessing the internet to conduct e-commerce.
- Through greater opportunities accessible via telecommunications, our MSMEs will be able to help us generate inclusive development and shared prosperity for all Filipinos, especially for those at the bottom of the pyramid.
Lastly, with this circular, President Rodrigo Duterte hopes to give the public a gift this holiday season that everyone can truly benefit from in the coming years.♦
Keynote Address of Secretary Ramon M. Lopez at the 2nd Manufacturing Summit (29 November 2017, Makati City)
KEYNOTE ADDRESS OF SECRETARY RAMON M. LOPEZ
MANUFACTURING SUMMIT 2017
29 November 2017, Makati City
Usec. Rowel Barba, Usec. Nora Terrado [and other DTI officials, Asec. Aldaba, Asec. Perez…;
Mr. Kunihiko Shinoda, METI Deputy Director-General;
Mr. Susumu Ito, JICA Country Representative;
Mr. Clay Epperson, USAID Deputy Mission Director;
Distinguished speakers and panelists; participants from other government agencies; industry associations; and the academic community;
Ladies and gentlemen, good morning!
Macroeconomic performance & economic transformation
These are indeed exciting times for the Philippines. Amid the global economic volatility, the outlook for the country remains positive as we have maintained our strong macroeconomic position.
Our first-to-third-quarter growth in 2017 stood at 6.7%, securing our position as the fastest growing economy in Asia. We outpaced our ASEAN neighbors such as Vietnam, which grew by 6.3%, and Malaysia which registered 5.9%. Our country’s impressive growth has only been eclipsed by China, which grew by 6.9% for the first three quarters of 2017.
Clearly, our recent performance demonstrates remarkable economic resilience, thanks to a resurging Philippine manufacturing industry. This year, manufacturing has been the country’s main economic driver, exhibiting a Q1 to Q3 growth of 8.3%—the highest among the main economic sectors.
The Philippines is now on the verge of economic transformation. While services was the main driver of growth in the past decades, manufacturing has been contributing more substantially to the nation’s economic growth since 2013.
Consider this: from 1999 to 2012, services registered an average annual growth of 5.4%, while manufacturing was growing at an average of 4.0%. But from 2013 to 2016, the average third quarter growth of manufacturing stood at 7.8% while services posted an average of 6.8%.
Another transformation is taking shape as economic expansion is being driven by investments, with capital formation accelerating by 8.6% in the first three quarters of this year. Compare this to consumption and government spending, which rose by only 5.4 and 5.3%, respectively.
With a growth rate of 10.4% in Q1 to Q3 last year (2016), fixed capital formation has remained robust. Durable equipment grew by 11.6%, driven mainly by growth in general industrial machinery and equipment (12.0%) and transport equipment (11.4%).
Meanwhile, net FDI inflows remain strong, amounting to US$5.1B from January to August 2017. With positive investor confidence, approved investments by the Board of Investments (BOI) from January to September 2017 increased by 33% to PhP408.7B from PhP296B during the same period in 2016. Manufacturing sub-sectors covering food, motor vehicles, fabricated metal, and wood products amounted to PhP38.5B, or 9.4% of the total.
High level growth & the employment challenge
Though manufacturing growth has been contributing significantly to our country’s economic growth, its share to GDP of 23% and contribution to total employment of 8% have remained quite unchanged in the last decade.
While our unemployment rate slightly worsened to 5.9% during the first three quarters of 2017 from 5.8% during the same period in 2016, our underemployment rate declined to 15.2% from 17.4% in the same period. Meanwhile, our poverty incidence also improved to 21.6% in 2015 from 25.2% in 2012.
Still, our employment challenge remains: we have 2.5M unemployed and 6.5M million underemployed fellow Filipinos.
The mandate of “Trabaho at Negosyo”
Last year, the Department of Trade and Industry (DTI) organized the first Manufacturing Summit that brought together stakeholders from the government, industry, and academe. The aim of the Summit was to discuss policy directions and strategies to revitalize our manufacturing sector.
With the theme “Trabaho at Negosyo,” the Summit was a venue for the fruitful exchange of ideas on the opportunities and challenges in the manufacturing industry, as well as the steps we could take in shaping its future.
Based on the panel discussions and breakout sessions in the Summit, we identified the following steps to sustain the resurgence of manufacturing and further expand the sector:
- First, as an initial step towards putting innovation and R&D at the center of our industrial strategy, we will establish innovation centers in the country. This will be done in close coordination with the Department of Science and Technology (DOST) and in collaboration with the academe and industry stakeholders.
- Second, we will revise and update our industrial policy to consider emerging disruptive technologies, like robotics, AI, and 3D printing. We will coordinate closely with the industry, academe, and other government agencies to discuss these and refine our industry priorities and targets.
- Third, we will continue the collaboration among government, academe, and industry. In particular, we will focus on the implementation of the priority measures recommended during the Summit’s breakout sessions.
Updates on the Manufacturing Summit 2016
Let me share with you some updates on the priority recommendations proposed in last year’s Summit:
As most of you here know, DTI is actively promoting innovation as key to the competitiveness of Philippine industries. We have modernized the BOI’s Investment Priorities Plan (IPP) towards this direction by providing for incentives for innovation and R&D economic activities.
- Back in May, we conducted the Inclusive Innovation Conference to launch the roadmapping for innovation in the country. This has been followed by a series of regional innovation workshops conducted in Metro Manila, Cebu, CDO, and Davao. A last one is set to be conducted in December in Clark. Through these workshops, we are soliciting inputs from stakeholders from the regions and we are aiming to formally launch the roadmap in the first half of next year. The conduct of these innovation fora and formulation of the roadmap resulted in a Memorandum of Understanding (MOU) that DTI signed with DOST to closely collaborate on our innovation initiatives. Both DTI and DOST intend to bring in the relevant national government agencies moving forward.
- The Intellectual Property Office of the Philippines (IPOPhil) is also formulating our National Intellectual Property Strategy (NIPS), and this will be a key part of our innovation roadmap.
- Through the Manufacturing Resurgence Program (MRP), DTI and BOI continue to promote collaborative agreements between industry associations, government, and academe in support of inclusive and innovative manufacturing.
- We also continue to consider human resource development as an essential element of our industry development programs. Towards this, we are closely coordinating with the Commission on Higher Education (CHED) and the Technical Skills and Development Authority (TESDA) with regard to reforms and programs for human capital development.
- We have been engaging as well various higher educational institutions from all over the country, both private and public, to do our part in bridging the industry-academe divide.
- With regard to infrastructure, DTI and BOI have been coordinating with the Department of Public Works and Highways (DPWH) in our convergence program on road connectivity for industry and trade development. Called “Roads Leveraging Linkages for Industry and Trade (ROLL IT) Program,” the goal of this program is to prioritize and implement road access infrastructure that leads to various industries and economic zones. Through ROLL IT, we are proposing Php12.3B worth of road infrastructure across the country under the proposed 2018 budget.
- We are actively supporting the amendment of the Public Service Act, which we hope will finally be done by Congress. And of course, we are supporting the government’s massive “Build Build Build” Program.
- Notwithstanding the recent dip in our Ease of Doing Business (EODB) ranking, the National Competitiveness Council (NCC) remains determined to push reforms in our business environment and improve our competitiveness.
- Regarding the development of Micro, Small, and Medium Enterprises (MSMEs), we launched earlier this year our money lending program called the Pondo sa Pagbabago at Pag-asenso (P3). President Rodrigo Duterte had also announced during the ASEAN Summit to pour as much as Php50B for SME development in the coming years.
- With regard to incentives and other forms of government support, we are coordinating with the Department of Finance (DOF) to ensure that these are performance-based, time-bound, transparent, and easy to administer. We maintain that incentives can be effective tools for industry development and ensure our competitiveness.
- And finally, regarding trade, we expressed our intention during the meeting between President Duterte and US President Donald Trump on the sidelines of the ASEAN Summit to negotiate and forge a free trade agreement (FTA) with the US.
The Inclusive Innovation Industrial Strategy (i3S)
After a year, we have refined our industrial strategy.
The Inclusive Innovation Industrial Strategy (or i3S) is the new industrial policy formulated by DTI-BOI that aims to grow globally competitive and innovative industries, with innovation at the front and center of industrial policies and programs.
With i3S, there are 12 sub-sectors that are top priorities for industry development, with a focus not only on manufacturing but linking together activities particularly through the servicification of manufacturing. This would connect services activities like design, R&D, engineering, and after-sales with manufacturing.
These sub-sectors and programs include:
- Auto and auto parts: Auto electronics, CARS Program, Public Utility Vehicle Modernization;
- Electronic manufacturing services: Auto electronics, medical devices, telecommunications equipment, power storage, civil aviation/ aerospace;
- Semiconductor manufacturing services: Integrated circuit (IC) design;
- Aerospace parts and aircraft Maintenance, repair, and overhaul;
- Chemicals: Petrochemicals, acyclic alcohols & derivatives, metallic salts & peroxy salts of inorganic acids, cyclic hydrocarbons, oleo chemicals;
- Shipbuilding & Ship-repair: Roll-On Roll-Off (RORO)m as well as small- and medium-sized vessels;
- Furniture, garments, creative industries: Manufacturing and design;
- Iron and steel, tool and die: Manufacturing and design;
- Agribusiness food & resource-based processing: Cacao, coffee, mangoes, bananas, coconut, rubber, bamboo, fruits & nuts, and other high value crops;
- Construction: Roads, railways, bridges, ports, airports, and low-cost housing;
- IT-BPM and e-commerce: Higher-earning and more complex non-voice services BPO, Knowledge Process Outsourcing (KPO) in medical, financial, and legal services; game development; engineering services outsourcing (ESO), software development, and shared services;
- Transport and Logistics: Land, air, and water transport, warehousing, and support facilities for transport given that huge services investments in infrastructure and logistics would boost the competitiveness of industries and improve connectivity within the country; and,
Major pillars and strategic actions
From this i3S policy, we have now laid out strategic actions to help us achieve our goals. These include:
Building new industries, clusters, and agglomeration via:
- Addressing gaps and linkages in industry supply and value chains;
- Expanding the domestic market base to allow industries to attain economies of scale and realize their export potential;
- Pursuing green policies in industries to make them more competitive, innovative, environment-friendly, and climate smart;
- Implementing aggressive promotion and marketing programs to attract more foreign direct investments especially those that would bring in new technologies;
- Addressing market failures by providing fiscal incentives that are well-targeted, performance-based, and time bound;
- Creating industry clusters to address agglomeration, economies of scale, and coordination issues; and,
- Promoting the establishment of domestic ecozones that would allow activities catering to both domestic and export markets.
Capacity-building and human resource development via:
- Designing human resource development and training programs to improve skills and establish tie-ups with universities and training institutions.
MSME growth and development via:
- Supporting SME development by boosting their growth and profitability through the 7Ms (Mindset, Mastery, Mentoring, Money, Machine, Market, and Models) as well as programs focusing on the establishment of common service facilities, and improving access to finance, technology, and skilled workers;
- Linking MSMEs with large domestic enterprises and multinationals;
- Promoting inter-firm and academe collaboration; and,
- Setting up efficient storage and logistics (like handling and cold storage).
Innovation and entrepreneurship via:
- Establishing an inclusive innovation and entrepreneurship ecosystem that would link together academe, industry, and government;
- Strengthening industry-academe collaboration that focuses on market-oriented research,
- Revising engineering curricula, particularly manufacturing engineering and work related to industries;
- Equipping universities to carry out research relevant to industries,
- Ensuring intellectual property protection;
- Setting up R&D incentives (like tax credit and accelerated depreciation); and,
- Setting up shared facilities for rapid prototyping and demonstration
Ease of doing business and investment environment via:
- Continuing to strengthen our institutional and regulatory framework by addressing corruption and smuggling, and eliminating bureaucratic red tape through streamlining and automation of government procedures and regulations;
- Establishing a single mechanism for coordinating business registration, application for permits and licenses, and investment promotion with local government units (LGUs) and other national government agencies; and,
- Continuing the big bang infrastructure investment to cover not only the building of physical infrastructure like roads, but also power, logistics, and a modern and efficient air and sea infrastructure.
Going back to the collaboration between DTI and DOST, the two agencies agreed to work together to create an inclusive innovation and entrepreneurship ecosystem in the country. Currently, we are working together in formulating and implementing our innovation roadmap.
Based on the aforementioned consultative workshops in NCR, Cagayan de Oro, Cebu, and Davao we have conducted to date, the major recommendations include:
- The establishment of shared services facilities (like FabLabs) and creation of innovation hubs;
- Collaboration among government, industry, and academe through joint activities and the use of physical and shared spaces;
- Capacity-building and skills training; and,
- Funding support.
In DTI, we are studying the possibility of transforming our 3-hectare Center for Innovation and Technology for Enterprises (or the old CITC) in Marikina as a possible innovation center (like Plug and Play).
The location is appropriate, given that Marikina is home to the footwear industry as well as woodworking and jewelry enterprises. It is also very close to education institutions like UP, Ateneo, Miriam College, and the Marikina University.
To conclude, our vision is for the Philippines to have creative and connected communities (3Cs) of different stakeholders like innovators, start-ups, SMEs, and large enterprises that will collaborate to produce new products and services.
Moving forward, we firmly believe that it is crucial for us to form an innovation council composed of representatives from the government, industry and academe. This would ensure that our country’s innovation policies and programs will be properly implemented leading towards the sustained resurgence of Philippine manufacturing.
Ultimately, these efforts will help us create not only employment opportunities and address income inequality throughout the country, but also ensure that the economic growth resurgence our country is experiencing will be felt by all Filipinos.
By working closely together, we can achieve our goal of generating inclusive growth and shared prosperity for our countrymen, especially for those at the bottom of the pyramid.
Thank you and mabuhay tayong lahat!
Opening Remarks of Secretary Ramon M. Lopez, Preparatory Regional Comprehensive Economic Partnership (RCEP) Ministerial Meeting (11 November 2017, Pasay City)
OPENING REMARKS OF SECRETARY RAMON M. LOPEZ
The Preparatory Regional Comprehensive Economic Partnership
Ministerial Meeting (Prep-RCEP TNC)
Fellow Ministers of ASEAN and our Dialogue Partners, we are gathered here today in preparation for the 1st Regional Comprehensive Economic Partnership (RCEP) Leaders’ Summit. But before anything else, it is my pleasure to welcome you all and your delegation once again to the Philippines.
For those of us who are tasked with providing guidance and vision in driving our respective economies forward in a constantly shifting global trade and economic landscape, we have our work cut out for us.
We have expressed our collective agreement to achieve a substantial conclusion to RCEP negotiations within the year. We emphasized this commitment during our meeting last September, and even expressed the hope that we will have something significant to report to our Leaders during the ASEAN Summit.
We have had 5 Ministerial level Meetings and 20 rounds of negotiations, with the most recent one hosted by Korea last month. We note the milestones and breakthroughs reached, especially those that yielded substantial outcomes like the conclusion of the Chapters on Economic and Technical Cooperation and the Small and Medium Enterprises.
We also welcome another encouraging development, which is that of Customs Procedures and Trade Facilitation (CPTF) and Competition Chapters that are nearing completion.
Meanwhile, we are still in negotiations to reach substantive agreements on key elements of the RCEP, a task which we have been engaged in since 2012. At this point, let us extend our full support to our negotiating teams, allowing them more room to navigate on contentious issues toward achieving resolutions. Equally, efforts must be further intensified in making this possible.
This is the challenge now facing us: we should be able to provide a concrete and tangible roadmap that our Leaders can agree to and endorse, which will lay the foundations for a binding agreement.
RCEP is of tremendous importance for our economies and the region, and our efforts today can bring about greater progress and economic sustainability for the coming years.
We therefore look forward to having substantial and fruitful discussions, and even solidify our positions in the process. It is imperative for us to finalize the Ministers’ Collective FINAL 12 November 2017 Assessment Report to the Leaders and the Joint Statement of Leaders in negotiating the RCEP.
To conclude, we would like to say that our hosting of this year’s ASEAN would never have been successful without your efforts, collaboration, and cooperation.
With this, I declare the RCEP Ministerial Meeting open. Again, thank you and mabuhay tayong lahat.
Opening Remarks of ASEAN Economic Ministers (AEM) Chairperson Ramon M. Lopez, 15th ASEAN Economic Community Council (AECC) Meeting (11 November 2017, Pasay City)
OPENING REMARKS OF
AEM 2017 CHAIRPERSON RAMON M. LOPEZ
15TH ASEAN ECONOMIC COMMUNITY COUNCIL (AECC) MEETING
Dear colleagues, we started this year with high hopes, and we are now concluding it on a high note. ASEAN has made tremendous progress and has had such a meaningful year this 2017. This was made possible with the dedication of our economic trade officials, who worked virtually non-stop to help us achieve our targets, and with the solid support and cooperation from our partners from the ASEAN Member States (AMS).
I recall 10 months ago, when the Philippines officially launched its Chairmanship of ASEAN bearing the banner theme: “Partnering for Change, Engaging the World.” Under this theme, our chairmanship had 6 thematic priorities, one of which was “Inclusive, Innovation-Led Growth” for the ASEAN Economic Community (AEC). This thematic priority affirms trade and integration as a powerful engine of economic growth and development for the AEC. In this regard, ASEAN has achieved a measure of success as we continue to link economies and pursue integration and cooperation with strategic external partners.
The establishment of the AEC in 2015 has engendered enormous opportunities in the form of a huge market worth US$2.5T. Vibrant flow of goods, services, investments, and skilled labor are among the benefits of this economic integration. Moreover, the ASEAN Vision and AEC Blueprint 2025 demonstrate that the region is making good progress in formulating a clear way on how to collectively address the opportunities that AEC present.
Nonetheless, we acknowledge that despite our efforts, the issue of development remains a pressing concern with inequity and inclusiveness remaining the biggest challenges within our economies and across the region. Without full participation in trade, growth cannot be truly inclusive and further progress in trade liberalization would be difficult if the benefits are not shared by all.
The theme “Inclusive, Innovation-led Growth” acknowledges the socio-economic dimension of regional economic integration and its contribution to poverty alleviation. This priority urges us to strengthen our commitment for more inclusive participation in the process of community-building, where we all are partners and everyone contributes. This will likewise ensure that the gains presented by economic integration are fully realized and shared by everyone in the region.
I remember our President Duterte also highlighting this point at the recently-concluded APEC wherein for us, the leaders, the way globalization should work is that everyone should emerge as winners, and that globalization should not produce winners and losers but everyone as winners.
This year, we also put greater focus on reinforcing our Micro, Small, and Medium Enterprises (MSMEs) by providing an enabling environment for its development and to enable them to scale up and participate in the global value chain. Given the breadth and extent of the MSME sector in the region, its development would directly contribute to spreading the economic benefits more widely.
Micro SMEs must be full participants and beneficiaries that closer regional economic integration brings. This means further strengthening the role and contributions of micro SMEs so as to attain a dynamic, inclusive, and people-oriented AEC.
We pursued this theme through 3 strategic measures, namely: increasing trade and investment; integrating micro SMEs in the global value chains; and developing an innovation-driven economy. These measures, in turn, were supported by 11 priority economic deliverables related to trade facilitation, trade in services, connectivity, inclusive business, e-commerce, and innovation. These deliverables would ensure the participation of the micro SME sector, as well as the marginalized—like the women and youth—in commercial activities.
With this mind, we are convening today to exchange views on what we’ve done so far in moving the AEC forward. For 2017, we have made good progress in getting AEC 2025 off the ground. After the adoption of the AEC Blueprint 2025, we concentrated our efforts on the development of the Consolidated Strategic Action Plan (CSAP) that serves as the operational framework for the AEC Blueprint 2025. We adopted the CSAP earlier this year and completed additional action plans that are relevant to further increasing intra-regional trade, like trade facilitation and e-commerce.
We take this opportunity as well to prepare and firm up our deliverables and report to our Leaders who are set to meet few days from now. These include notable developments in our external economic relations like the completion of the negotiations for the ASEAN-Hong Kong, China Free Trade Agreement (or AHKFTA) and the Investment Agreement (AHKIA).
There is also the endorsement of the Terms of Reference (TOR) of the Feasibility Study for an ASEAN-Canada FTA Agreement and the subsequent undertaking of the study. Further, there is the convening of the Joint Working Group that is tasked to assess the possibilities for the resumption of the ASEAN-EU FTA negotiations. Lastly, the level of engagement that we had on the Regional Comprehensive Economic Partnership (or RCEP) this year is unprecedented, demonstrating and galvanizing ASEAN’s leadership in the negotiations process.
Ladies and gentlemen, ASEAN continues to progress year after year through our concerted efforts. The challenge of sustaining this and ensuring that we reach the kind of community that our forefathers envisioned us to become—a community that is secure, inclusive, prosperous, and stable—requires us to work even more closely.
My term as AEM Chairman comes to an end. Allow me to express my deep gratitude to everyone for your support and hard work to ensure that our Chairmanship, which coincides with the 50th Anniversary of ASEAN, is a success. I would also like to congratulate our fellow economic trade officials for a job well done.
Again, thank you very much and I wish a productive discussion ahead of us.
Mabuhay tayong lahat!
Statement of DTI Secretary Ramon M. Lopez, Chair 49th Association of Southeast Asian Nations (ASEAN) Economic Ministers' Meeting (11 September 2017, Pasay City)
Statement of DTI Secretary Ramon M. Lopez, Chair 49th Association of Southeast Asian Nations (ASEAN) Economic Ministers' Meeting Press Briefing (10 September 2017, Pasay City)
Statement of DTI Secretary Ramon M. Lopez, Chair 49th Association of Southeast Asian Nations (ASEAN) Economic Ministers' Meeting Press Briefing (9 September 2017, Pasay City)
Statement of DTI Secretary Ramon M. Lopez, Chair 49th Association of Southeast Asian Nations (ASEAN) Economic Ministers' Meeting Press Briefing (8 September 2017, Pasay City)
Speech of DTI Secretary Ramon M. Lopez 49th Association of Southeast Asian Nations (ASEAN) Economic Ministers' Meeting Opening Ceremony (7 September 2017, Pasay City)
Speech and presentation of DTI Secretary Ramon M. Lopez at the opening of the Manufacturing Summit 2016 (26 November 2016)
Statement of DTI Undersecretary Ceferino S. Rodolfo, Philippine Lead 49th Association of Southeast Asian Nations (ASEAN) Economic Ministers' Meeting Press Briefing (10 September 2017, Pasay City)
Statement of DTI Undersecretary Ceferino S. Rodolfo, Philippine Lead 49th Association of Southeast Asian Nations (ASEAN) Economic Ministers' Meeting Press Briefing (9 September 2017, Pasay City)
Statement of DTI Undersecretary Ceferino S. Rodolfo, Philippine Lead 49th Association of Southeast Asian Nations (ASEAN) Economic Ministers' Meeting Press Briefing (8 September 2017, Pasay City)
Opening Statement of Trade Undersecretary/BOI Managing Head Ceferino Rodolfo Press Conference on BOI Guinogulan Awards (25 April 2017)
Press Statement on Ease of Doing Business Reforms by Undersecretary Rowel S. Barba (May 2018)
PRESS STATEMENT ON
EASE OF DOING BUSINESS REFORMS
CEODBG UNDERSECRETARY ROWEL S BARBA
- Last week, the Doing Business Survey Team of the World Bank came to our country to validate the reforms for the 2019 Cycle of the Doing Business Survey. We would like to share these reforms so that our citizens will be better informed on the interventions of government on how to make doing business in the Philippines easier.
- You will recall that the Philippines ranking dropped from 99 to 113 in the 2018 WB DB Survey. Since the time we met in November to announce the ranking, the EODB Task Force, composed of 13 agencies have been working doubly hard.
- I am pleased to report the reforms made by the various agencies of your government.
- On Starting a Business
- [SEC] Full operationalization of the Company Registration System in November 2017, which is an online registration for company registrations being operated by the Securities and Exchange Commission;
- [QC] Setting up of an Enhanced One-Stop Shop in Quezon City starting January 2018 in Quezon City, which co-located all concerned units/offices in one facility – the Business Permits and Licensing Office, the Zoning Office and the Treasurer’s Office, and the Bureau of Fire Protection – and made it convenient for applicants to register new businesses;
- [BIR] Instituting a Single Window Transaction Project where applicants can submit documents and be issued the Certificate of Registration and Authority to Print;
- These measures will reduce procedures from 16 to 10 and the processing time from 28 days to 16 days.
- On Dealing with Construction Permits
- [QC-LGU] Setting up of a One-stop Shop for Construction-related Permits in Quezon City that co-located 3 offices of the city government and the Bureau of Fire Protection;
- Making the Barangay Clearance a post-requirement;
- These measures resulted to reduced procedures to 8 from 23 and the processing time to 36 from 122 days.
- On Getting Electricity
- [MERALCO] Online application for electricity connection from MERALCO, including setting up of a MERALCO booth in QC’s One-stop Shop for Construction Permits;
- Eliminating the requirement to secure a Certificate of Final Electrical Inspection from the Quezon City Government, which is now issued together with the Certificate of Occupancy;
- Procedures have been reduced to 3 from 4 and processing time from 37 to 28 days.
- Registering Property
- [LRA] Automation of the operations of the Land Registration Authority and the Registry of Deeds in Quezon City that shortened processing time and led to better transparency of information;
- In terms of quality indicators, the Posting by LRA of relevant statistics is also a major reform that shows transparency;
- Procedures remain at 9 steps but the processing time improved greatly from 35 to 20 days.
- Enforcing Contracts
- [Supreme Court] Implementation of the automated raffling of cases and electronic case management system under the Supreme Court’s eCourt implementation
- That government is serious in promoting ease of doing business is an understatement. We take to heart our task to improve our competitiveness by making doing business in the Philippines easier.
- But there are more REFORMS UNDERWAY.
- Government is working on the following that will further promote ease of doing business:
- Signing into law of the Ease of Doing Business and Efficient Government Service Delivery Act of 2018;
- The amendments to the Corporation Code, which will affect two indicators – Starting a Business and Protection Minority Investors;
- The Secured Transactions Bill, which will strengthen the legal rights index under the criterion on Getting Credit;
- Implementation of the Unified Employee Enrolment Portal, which is an online one-time reporting system to be established by the Social Security System, the Home Development Mutual Fund, and the Philippine Health Insurance Corporation for employees of newly registered businesses. This will reduce the procedures and processing time for enrolment of new employees in the criterion on Starting a Business;
- Implementation of the Transfer Assistance Program by the Quezon City government that will streamline the procedures for securing the tax declaration, tax clearance, and for paying the transfer tax – all of which will reduce the processing time for registering property.
- We assure our kababayans that we will continue to pursue these reforms because as we increase our competitiveness, more investments will come in, and more jobs will be created.
- We hope that our friends in media will help us relay these achievements to the public, and to the world at large to show that the Philippines is always open for business.