Opening Remarks by Secretary Ramon M. Lopez
Preparatory Meeting of ASEAN Economic Ministers (AEM)
My fellow ASEAN Economic Ministers (AEM);
Deputy Secretary General Lim Hong Hin;
To all the delegates joining us today; Distinguished guests, Ladies and gentlemen, good morning, and welcome to the Preparatory Meeting for the 31st ASEAN Summit and Related Summits for the 31st ASEAN Summit and Related Summits.
Colleagues, allow me to express my heartfelt gratitude for your support for the Philippines’ chairmanship of ASEAN 2017.
This year, we’ve made good progress in getting the ASEAN Economic Community (or AEC) 2025 off the ground. We’ve managed to do this by concentrating our efforts on laying the foundation for the implementation of the AEC Blueprint 2025 through the Sectoral Action Plans (SAP) and the Consolidated Strategic Action Plan (CSAP).
We also worked doubly hard on enhancing our external partnerships. These include upgrading and enhancing our existing free trade agreements (or FTAs), intensifying our efforts to complete on-going FTA negotiations, considering new FTA partnerships, and strengthening our economic cooperation mechanisms. Nonetheless, there is much work that needs to be done in order to ensure that we stay the course.
Today’s meeting agenda covers very critical areas that are instrumental in advancing the region’s internal integration process, as well as in our economic integration efforts with our external partners.
We have as our major agenda the preparations for the 15th AEC Council, wherein we will take stock of on what we have accomplished thus far in moving the AEC forward.
We are also set to discuss outstanding issues in FTA negotiations. This year, significant progress has been achieved in moving the negotiations for the Protocol to Amend the ASEAN Japan Comprehensive Economic Partnership Agreement (AJCEP) and the Regional Comprehensive Economic Partnership (RCEP) to where it is today. But there are still areas that need to be further deliberated and ironed out if we are to finally conclude the negotiations.
- In particular is the preparations for the Informal AEM-METI of Japan Consultations, which will take place later today. During our Consultations with Japan, we will discuss the only remaining issue to date that withholds the finalization of the Protocol on the AJCEP.
- Another important agenda item that we will tackle today is the preparations for the Preparatory RCEP Ministerial Meeting. Discussions will focus on the Collective Assessment Paper to the Leaders and the Joint Leaders’ Statement on the RCEP. I understand the Assessment Paper provides an inventory of measures/targets that can be completed this year, those that need to be further discussed, and those that require reconsideration of current mandates. This is a welcome progress as it gives everyone a comprehensive overview of what has been achieved in the past 20 Rounds of RCEP Negotiations and gives us a sense of direction of where to proceed and what to focus our attention on. The outcomes of this meeting is expected to lead up to the RCEP Leaders Summit this 14 November 2017.
With this, I would like to thank everyone for your continued commitment to the AEC agenda and I look forward to more meaningful exchanges. Thank you and mabuhay!
Speech of Secretary Ramon M. Lopez, National MSME Summit 2019
SPEECH OF SECRETARY RAMON LOPEZ
Creating Smarter MSMEs
NATIONAL MSME SUMMIT 2019
16 July 2019, Philippine International Convention Center (PICC) Manila
Unang una nabanggit ko po ‘yung formidable na adjective di ko po alam kung bakit saan galling ‘yun. Pero actually masasabi ko na ho kaya po siguro ko naitanong na recognition ay dahil po actually sa ating men and women of the Department of Trade and Industry, ang mga partners po natin from the private sector, sila po ang nagpapagana ng mga program nationwide.
And following President Rodrigo Duterte’s “tapang at malasakit” – the platform. The DTI has put extra focus in developing Micro SMEs. It also part of the President’s Ten-Point Socioeconomic Agenda that was announced during his first State of the Nation Address (SONA) in 2016. And three years later, I’m honored to present to all of you the result of the government commitment of the Micro SME Development Council para po sa ating bayan. Our goal has been to establish vital and game-changing policy reforms, programs, and initiatives. Ang bagong programa po na di nagawa dati ay atin pong madadagdagan. Sabi nga po ni Usec. Zeny, tuloy-tuloy po ang ating mga bagong programa and new initiatives to empower our Micro SMEs and to make them smarter entrepreneurs. Lagi po nating binabanggit, every smarter para po really we can see prosperity, we can see progression sa ating Micro SME sector.
So as we always say, it is so easy to start a business but the question really is how can we grow them and how can we sustain them? How do we differentiate their products and really become big? The Micro become Small, the Small become Medium, the Medium entrepreneur become Large.
The Philippines is currently considered one of Asia's economic bright spot, with our GDP growing over 6% sustainably for the past 15 quarters and the average is about 6.2%. We’ve been given triple B plus credit rating SME that showed how stable our macroeconomic reforms are and more reforms that we are about to implement.
Our country’s unemployment rate went down to 5.1%, and this is the lowest in nearly 40 years. And this is partly due also 1. The rapid growth in investment. For example, in the foreign investments, we’ve been approving investments to the tune of Php670B in 2017 and that was the record for the past 15 year – history of BOI. And in 2018, that will improve to Php915B record almost a trillion. Kaya po this year our target is Php1T.
Why am I mentioning investments? Because sa ating program po sa Duterte Administration, napakaimportante po ng trabaho. Investments create job. And for every job that we create, we lift one person and one family out of poverty. Ganun po ang implication nun. And the reason why I mentioned the unemployment rate as well, big part of that is also due to the self-employed at dyan po pumapasok ‘yung Micro SME development natin. Palakpakan po nating ang SME Development because kung titignan nyo ‘yung self-employed ‘yan po ‘yung lumalaki din under the employment rate statistics.
We attribute our country’s undeniable economic growth and success to the vibrant entrepreneurship spirit of the MSME sector, which plays a significant role in reducing poverty and achieving inclusive growth.
This one what we have noticed also and this is with the help of Go Negosyo. This is an advocacy for 40 years with Joey Concepcion and what we’ve noticed over the years maybe over more than a decade already, we’ve seen a transformation. We now see a lot of young people going to business for a reason, for a purpose. Hindi po last resort na ang pagnenegosyo. Dati 15 years ago, anong ginagawa mo? Siguro si George na experience to. Anong ginagawa mo? Nagnenegosyo lang ho. Natatakot ka. Nahihiya. Parang ang implication, you cannot apply a job, you cannot find a job at lahat kayo puro nagnenegosyo. At ngayon, nakikita natin how proud and passionate the entrepreneurs are, pursuing a business idea, a big idea and most probably an innovating idea -- new models, new concept, new innovating platforms, even digital. And this is the kind of mindset that I believe we have started to develop. I would say that these are a cultural change that entrepreneurship job is a tough job. Hindi mo nagagawa overnight and takes years, decades and at least I think we’re seeing that we’re moving in the right direction. Dumadami na pong nagiging self-employed, the Micro becoming Small, that we see a more inclusive, more pervasive type of development.
At sa “tapang at malasakit” program po ng ating Pangulo, siya po pag nakakausap nyo siya very sincere po ng intention nya. Tulungan natin ang mahihirap, ang malilit. Sa larangan ng entrepreneurship ito po ang mind growth -- the bottom of the pyramid of the entrepreneurship triangle. Kaya po ‘yung po ang ma empower natin. There’s a multiplier. Imagine that tallies 99.6% on the total number of microenterprises. It’s practically the whole triangle. There’s only 0.4 wala pang 1% of the large enterprises.
And the reason why there is na sabi nga nila na challenge na hirap na hirap na ang mga Micro bakit ganito lang ang income. So really if you really think about it, the challenge to all of us here, enablers of Micro SMEs is how do we increase the contribution? And it’s really depending on the kind of enterprise that we have, the business model that we have, the value adding our business would have because when you see the value added there is profitability. Higher value, higher pricing, competitive costing, you offer something different needed in the society and therefore the profitability is there and of course someone leading toward prosperity.
So sabi nga natin same value same hirap ‘yung profitability mas malaki and therefore the drive of the Department of Trade and Industry is how can we empower the nation to become smarter entrepreneurs. That is how we can improve lives. At napakasincere po ng intention ng ating Pangulo matutulungan natin sila sa pag-iimprove ng kabuhayan ng bawat Pilipino kung dyan nakafocus ang ating attention. And really the DTI together with ng ating mga educators, mentors ‘yan po ang passion nakikita nila.
So there’s so many of you who are really extending beyond sabi nga sa DTI “Serbisyong higit pa sa inaasahan”. I think you are all really making big difference to the lives of others. And what is life all about? To really help others, to really give for others.
So ito po ‘yung gusto kong i-sight na number. Our encouraging economic growth story is bringing more opportunities of growth for Micro SMEs. Official data from the PSA shows an upward trend in the percentage share of small enterprises to the total population of established businesses, from 8.2% in 2004 to 9.56% almost 10% in 2017. There is a decrease to share in microenterprises, as a percentage share to ha hindi numbers, from 91 to 89% in 2017. So microenterprises are leveling up to the “small” size category.
The increasing number of registered businesses since 2016 is indicative of the positive impact of the improved business climate. This is due to the government reforms and initiatives under the Duterte Administration.
While survey-generated data provided by the PSA shows MSMEs only less than a million about 900,000. We are receiving reports that the sector’s number may be more. Data gathered from the submission of the LGUs. Ang number na po ngayon 1.5M registered enterprises in the country. Aside from dumami sila they grow in number that also shows the former informal sector are now registering also. So that’s the reason why marami na ‘yung bilang ngayon nareregister sa LGU and again as a partly due to all your efforts. Dati they want to be informal ngayon they like to grow their business and to grow your business you really just have to be the formal sector sooner or later. Because for you to grow eventually hahanapan na kayo ng resibo, hahanapan na kayo ng mga papeles, documents. You want to borrow from the bank, from the formal sector so all this security, registering sooner or later. Therefore we allow the informal sector that’s the reason inenroll sila in their entrepreneurship journey, there are those who really started in informal sector ibig sabihin unregistered but eventually we know that they are also register.
7Ms for MSME Development: A Whole-of-Government Commitment
Now, in the DTI we have adopted of course the whole DTI I mentioned Trabaho, and the Micro SME -- Negosyo. Of course there’s this third branch – the Consumer Protection under po ‘yun kay Usec. Ruth Castelo. Kasama din dyan prices and standard compliance. But in the MSME development we adopted a 7M approach. So pasensya na dun sa mga laging nakakarinig ng 7Ms siguro memorize nyo na rin. Pero ito po this has really provided a framework for our Micro SME development. MSME development is an important pillar of the country’s public-private partnership. In 2017, the Philippines’ chairmanship of the ASEAN paved a way for the country to lead the region in promoting dynamic and innovative MSMEs. Actually, Micro SMEs they call it MS. MEs para madali kasi nabubulol sila sa MSME. In ASEAN and also in WTO it has become already now in agenda because of the Philippine intervention. So worldwide, inaadopt na po ang SME development critical development strategy for inclusive growth. This was due through the adoption also of the 7Ms Framework for Successful Entrepreneurship. This strategy specifically identifies Mindset Change, Mastery, Mentoring, and we also provide the Machines, different Models of Negosyo, Money at pag may produkto na Market access. So it’s a 360 degree approach to SME development and it guides us in the conceptualization and implementation of policies and programs.
Recognizing the need to lay out all these strategies and action plans, DTI, as chair of the Micro SME Development Council, has been leading the multi-sectoral and multi-stakeholder effort. This concerted action will provide mechanisms, policies, and programs that will benefit and empower those at the bottom of the pyramid.
MSME Development Plan 2017-2022 Accomplishments
In the past three years, the country has been moving forward on the momentum set by the 2017 MCA or the Manila Call to Action, the approval of MSME Development Plan 2017-2022 or SME Development. We have put forward the MSME Development Plan for 2017-2022. So sinabay po natin ‘yan sa Philippine Development Plan.
It adopts five strategic goals. These include: (1) improving business climate; (2) improving access to finance; (3) enhancing management and labor capabilities; (4) developing access to technology and innovation; and (5) expanding access to markets.
MSMEDP Strategic Goal 1: Fostering a Convergence Government Mindset (Business Climate)
First on our list is the game-changing passage of RA No. 11032, or
the "Ease of Doing Business and Efficient Government Service Delivery Act of 2018.” Known as the EODB Law, this legislation will benefit the Micro SMEs. Ibig sabihin, napakabilis siguradong mabilis ang processes getting permits in government. Ayaw ni Pangulong Duterte na tumatagal ang mga proseso sa mga gobyerno, mga government offices that’s why they make sure that ang mga proseso sa gobyerno ay di tatagal sa 3 days for simple transaction, 7 days for complex transaction and 20 days for highly technical transaction.
At ito po ang effort na to ay pinangunahan po ni Usec. Rowel Barba, Asec. Jean Pacheco at kasama po natin dito ay ARTA o Anti Red Tape Authority, Civil Service Commission, and Office of the Ombudsman.
Sinisigurado po ng ating Pangulo na hindi po nahihirapan ang ating mga kababayan. Allergic po si Presidente dun na pipila, naghahantay, di lang lingo linggo, buwan buwan pag minsan may taon na po na paghahantay sa pagbigay ng business permits.
Under this Ease of Doing Business law, kasama na dyan ‘yung established na mga Business One Stop Shop and eventually a portal — one business portal wherein that smartphone will now be our device kung saan tayo magreregister ng negosyo later on. And imbis na pupunta ka sa DTI, SEC, BIR, LGU Mayor, SSS, Philhealth, Pagibig -- lahat ‘yun lalagay na sa smartphone dun ka na mag fifill up. And less than one hour na fill up mo na you are able pay to e-payment system and you have option to claim your business permit. ‘Yun po ang goal natin. Target po before the end of the year. Meron na po kaming nagawa na prototype so nakita ko na it’s possible connecting the SEC, BIR etc.
We are also vigorously implementing RA No. 10644, or the Go Negosyo Act. This law lowers the cost of doing business for MSMEs by bringing government services closer to the community, nabanggit po ni Usec Zeny kanina. We now have 1,071 Negosyo Centers, 824 during the time of President Duterte, over 50% during the time of President Duterte.
These Negoyo Centers provide Micro SMEs na nakakalat to bawat municipality. If you want to register your business, business name registration; business advisory; business information and advocacy; product development; trade promotion; financing facilitation – they will tell you kung saan may malapit na P3 Pondo sa Pagbabago at Pagasenso, microfnancing and investment promotion. It also tells us syempre Micro SMEs that you can register in barangay micro business in the Negosyo Center.
The Barangay Micro Business Enterprises (BMBE) registration set up in the DTI Provincial Offices (PO) through the Negosyo Centers. This resulted now 80,000 BMBE registered wherein before it starts in the DTI mga 60,000 yan because before it supposed to be registered with the LGUs. Because in the LGUs siguro nahihirapan sila magregister mostly for consideration so di na lumaki yun. Now it’s now 80,000 and 22,714 business names registered 585,174 services rendered to Negosyo Center clients.
The NCs also facilitated 5,743 loan applications to partner financial institutions (FIs) with 2,727 MSMEs availing of loans. So ito po ‘yung mga nakafacilitate. In fact overall, DTI has assisted more than 2M clients, reaching more MSMEs nationwide. That’s exactly 2.8M clients. So kinocompute ko the unemployment rate I mentioned earlier is down to 5%. So ang unemployed 5% mga 2M. So technically we should be reaching out this 2M to offer them business alternatives, business opportunities. So far our Negosyo Centers has reached already the 2M mark. 2.8M na ang kanilang natulungan. We want to continue the questioning, the mentoring, pagnenegosyo so that they can be transformed into smarter entrepreneurs as we mentioned the ultimate goal of all our programs.
We also worked to simplify and fast-track the process of getting the License to Operate (LTO) alam natin problema po ito ng ating Micro SMEs -- LTOs, CPRs from our partner FDA. But don’t worry, with the EODB law our group, Usec. Rowel, Asec. Jean are working on how can we really fast track the processing. Kaya nga sumunod sila 20 days ang maximum. So those steps within their control should not be more than 20 days kasi highly technical so that is the challenge there.
In fact, we’ve started a pilot program in the NCR kung saan if you are a microenterprise with less than Php3M size of business and low risks products, you will just register and have LTO clearance you won’t need anymore the CPR. So exempted na po and Certificate of Product Registration. So maraming matuutwang mga microentrepreneurs.
On other initiatives to improve the business climate, this is a new one recently signed by President Duterte, RA No. 11232 or the Revised Corporation Code of the Philippines. Ito inaallow na ang one-person corporation (OPC) so di mo na kaylangan maglagay ng limang directors, stockholders. One-person corporation can now be registered and with no minimum capital requirement to register. So ang alternative ngayon if you’re a micro start-up either to register with the DTI kasi for a while you said wag na natin gawin ‘yung DTI na business registration pero you don’t realize na in the DTI mas madali pa rin siyang paraan if you want to start your business and register wala na ibang documents required. So we are keeping it just for that reason. Kasi if you go to SEC, the One-person corporation facility is you have to submit some data, some information and documents. So we really have that some option the DTI way. And as you know, ‘yung DTI business registration medyo mayabang sila Usec. Rowel, Asec. Jean -- 15 minutes na lang po ngayon ‘yan di na 3 days. But sabi nila kahapon 7 minutes na daw kasi online na. So congratulations to the group of Ease of Doing Business.
MSMEDP Strategic Goal 2: Delivering Affordable Money Access to Filipinos (Access to Finance)
Following the President’s directive to kill the “5-6” money lending system, to provide easy access, no collateral micro financing fund for our MSMEs, the government set up the Pondo sa Pagbabago at Pag-asenso. We started this with the President I think December 2016. So nagumpisa na noong 2017. As of May 2019, ‘yung pondo po na Php2B ang napautang na ay Php3B. Bakit? Kasi napaikot na, nababayaran and nabibigay pa natin. Php3B na ang napahiram and they were released to 83,000 beneficiaries ganun kadami. And this year with the new budget, madadagdagan na naman po. Ang final ang alam ko Php1.5B so that will grow to another, the Php2B will grow to Php 3.5B. Of this amount, Php7.5M were released to 457 borrowers in Marawi as part of the Marawi Rehabilitation Program. Php26M to 335 families of soldiers killed or wounded in action. So si Presidente natulungan talaga ‘yung mga nahirapan meron din programa sa Administration, meron pa ngang financing wala munang babayaran in 2 years -- no interest for those who killed in action/wounded in action families. And Php3.1M to 108 borrowers dun sa mga na displaced nung closure of Boracay. That’s been handled by SB Corporation.
Now P3 is now available in 80 provinces through 339 accredited conduits. So what we always do is we always start in the private sector so we can spread out the service immediately. So in the pipeline for accreditation are conduits from 8 more provinces. DTI with the SB Corp. also inked a partnership with ePLDT subsidiary Curo Teknika. This partnership will allow MSMEs who wish to avail of the P3 program to speak to a P3 contact center agent through P3 hotline ‘yung 651-3333. Through this program, we can now reach out to entrepreneurs at the grassroots and the marginalized communities and assist them to start or grow their business.
In terms of MSME response and recovery from natural disasters, DTI recently partnered with Cebuana Lhuillier Insurance Solutions, AXA, GIZ on the latter’s Regulatory Framework Promotion of Pro-Poor Insurance Markets so mga micro insurance naman po ito.
Next is I want to highlight the recently signed RA No. 11057 that’s the Personal Property Security Act (PPSA). But these are all the passing remark I was telling you earlier. This law will boost access to credit kasi in short we have partnership with the IFC the International Finance Corporation wherein di mo kailangan ng collateral ibig sabihin movable collaterals, non-traditional collateral such as account receivables, inventory, warehouse receipts, crops, livestock, machinery, and equipment can now be considered as chattel mortgages and you can borrow and get those.
We, at DTI, believe that this will greatly impact our Getting Credit indicator. Dito po sa Ease of Doing Business rating of the World Bank.
Financial inclusion is a stated priority of government, which goes beyond access to bank loans. This should also include creative mechanisms for tapping equity and venture capital financing for promising Micro SMEs.
MSMEDP Strategic Goal 3: Integrating the Right Entrepreneurial Mindset, Mastery, and Mentoring (Management and Labor Capacities)
Having realized the importance of creating a positive entrepreneurial spirit for Filipinos, we have successfully installed new initiatives to lead a nationwide paradigm change. Ito po ‘yung kinikwento ko kanina. The cultural, entrepreneurial revolution that we all want to happen.
And a massive campaign for entrepreneurship development was launched in 2016 by DTI in partnership with PCE-Go Negosyo, the HAFFI, Philippine Franchise Association, Philippine Marketing Association, the labor entrepreneurs, to all the mentors of the different association as well in doing all this Kapatid Mentor ME Program. So we put a brand also a Kapatid, kapatid in business, kapatid po ng Micro SMEs. Since its establishment, this program has been attended by 42,261 participants and has produced 5,393 graduate mentees kasi lahat ng umattend only about 25 will be selected including the mentoring program na 9-week program naman po ‘yun covering different subjects. Product dev, marketing, financial literacy, finance, accounting up to the design packaging etc. up to the business improvement plan preparation. At saka sila magprepresent ng parang thesis nila – thesis improvement plan. ‘Yung mapipili pa normally there would be a micro financing group at the end of that program really to fund ‘yung mga BIP -- business improvement plans nung mga entrepreneurs.
So tuloy tuloy na ‘yung pag improve ng negosyo. Marami na pong sumali over 5,000 divided into 322 batches covering 101 provinces at lahat po ito ay naging posible dahil po sa Regional Operations Group. Mga Regional Directors, Provincial Directors, mga staff, SMED together with our partners here. Can I ask all the Regional Directors, Provincial Directors and regional staff at mga SMED Council partners to please stand and be recognized. Maraming salamat po sa inyong mga tulong kayo po ang dahilan kung bakit lumalaki ang Micro SME sa ating bansa at nagiging mas matatalino ang mga Micro SME.
So 322 batches over 101 provinces di 101 probinsya natin ibig sabihin umikot tayo umulit sa mga probinsya. As of June 2019, there are already 677 certified mentors under the program. So ang mga mentors po pwede po bang maimbitahan na tumayo din para mapasalamatan at marecognize. Those entrepreneurs, those private sector, mga agri entrepreneurs sila Dr. Dar and the gang and the mentors.
Ang nilaunch po namin ngayon online mentoring. Q and A online. So ‘yung online mentoring natin ita-tie up sa PTTC. We have PTTC ASEAN SME Academy para lahat ng mentors nakaonline dun and anytime micro entrepreneur can just go online. You know when you’re in business dadami ang question sayo anytime of the day even middle of the night. And you just have to ask someone to what’s next step to take. So questions in our daily lives in business. So very important ang mentoring.
Ngayon nabanggit ito ni Usec. Zeny. We never stop because you know because ang organization ng DTI is only up to provincial level – Regional Directors, Provincial Directors and the staff. The reason because of the Negosyo Centers were now able to go to the municipality pero di pa kumpleto because of budget consideration and ongoing. At least we establish namin ‘yan before and during this time and now 1,071 so target mga 1,400 but the challenge does not stop there. We challenge the Regional Operations Group. Alam nyo po bakit merong barangay health clinic? Bakit merong mga barangay social worker? Bakit walang barangay Negosyo Centers? Wala tayong budget, wala tayong tao. DTI we’re only few thousands but there are less 45,000 ba? So wala.
Again, na-challenge na naman kami and another initiative to be started. So ganito na lang, we partner with all the barangays, identifying through the barangay chairman, at least one negosyo advocate and di tayo ang magswesweldo dun, ‘yung mga barangay. We tie up with them and we do our Negosyo Serbisyo sa Barangay using their organization. So sabi natin lahat ng mga baranggay dyan under the Negosyo Center, under the municipality just get their negosyo advocate some kind of negosyo disciple and the DTI negosyo disciple will now lead to the Negosyo Center. So lahat sila malalaman nila meron palang ganyan, meron pala tayong Negosyo Center malapit satin, pumunta tayo run.
Ito pa the Negosyo Center people and mentors will now go down to the barangay to do the program there. ‘Yun po ‘yung kinikwento ni Usec. Zeny na lahat po naabot natin na barangay ay ang laking pasasalamat dahil nakikita nila DTI in action kasama ng mga private sector mentors naglelecture sa barangay basketball court, sa barangay center because our program will be meaningless kung di tayo umaabot sa grassroots.
Andyan po ‘yung kailangan talaga ng tulong ng ating mga kababayan -- grassroot level. Kaya kahit saan basta negosyante, gawan ng paraan kaya tayo umaabot sa grassroots and with the help of our partners -- private sector and DTI at ngayon may bago tayong partner kinausap na rin natin ‘yung DILG. They committed to help us in our program. Kaya po sila magiissue rin ng memo. But despite of lack of budget, at least nakaabot na tayo sa 693 barangays. ‘Yung mga Negosyo Center sa mga regions and provincial offices pinapadala nila ‘yung mga seminars that they have. Assisting 28,193 clients nationwide so ang dami na. And it is had develop 200,000 new enterprises from barangays. Ito pa nakafocus po sa 4th to 6th class municipalities that is suspected to provide more than 500,000 new jobs.
You know for every job again na magawa natin tanggal ang isang tao to poverty. Tanggal ang pamilya nya to poverty. So in 500,000 and we continue to reach the 2M and kung pumunta sila sa Negosyo Center at naaprubahan natin, hopefully ‘yung 4 percent na ‘yun – ‘yung 2M mabawasan na talagang bumaba talaga ‘yung unemployment rate at lahat may kabuhayan na. ‘Yan ang talagang inclusive growth.
As a nation of vastly young population, we have prioritized the implementation of Youth Entrepreneurship Act, or RA No. 10679. Ito naman ang mga kabataan, comprehensive package of interventions to help and encourage young Filipinos to develop their entrepreneurial skills.
We recently organized a roadshow in Mindanao to introduce Youth Entrepreneurship Program as an avenue of opportunities for young people to help them explore their full potential to become successful entrepreneurs. So ito ‘yung kinikwento namin na mga young entrepreneurs to have full experience to ideas. It’s not the usual negosyo models to really asking them to have more innovative businesses. And innovation is really their cup of tea andyan na ‘yung mga digital related enterprises that they do, platforms that they develop.
Now, trainings and seminars meron din po tayo we have the Philippine Trade Training Center (PTTC). That is the center PTTC that used to be focused on the exporters, developing exporters, teaching them for safety, how to enter this market, the FTA, the requirements etc. Now, we’ve converted the PTTC also into a Global Micro SME Academy what we call GMEA. Kaya po online ang dedevelop natin. With PTTC anytime any entrepreneur can with this seminar in their area can go to PTTC and enjoy the lectures, the different topics that they taught there.
So the PTTC GMEA will provide now SME’s entrepreneurial education modules. This is a one-stop multi-platform online learning as well and information resource to provide training and mentorship. Also mga SMEs provided also by some other ASEAN mentors.
The Academy offers around 50 training courses on finance and accounting, management, marketing, operation everything even logistics. DTI spearheaded the creation of public-private partnership in Strengthening Disaster Resilience among MSMEs. Disaster resilience on the Micro SMEs we have a lot of programs there. These were participated in by about 3,000 MSMEs. With the assistance of GIZ Philippines, DTI has also capacitated the Micro SMEs to improve their business operations to be more environment-friendly and climate-smart. We have benefitted more than 21,000 Micro SMEs.
We have also expanded our vocational and training centers for Micro SMEs. We were working with TESDA, with the group of Usec. Fita for the Innovation and capacity building. The TESDA we are working hand-in-hand to promote the Skills Training for Employment/Entrepreneurship Program (STEEP). Now the skills employment in TESDA we suggested the TESDA that when they train for skills di lang for employment, ‘yung skills pwede din pang negosyo. So let’s say this coffee making become a barista to put up your own café and many more.
Even technology related training – agri sila Sen. Cynthia Villar so many farm schools TESDA accredited they become now better agri -entrepreneurs with the farms schools. I think 1,800 na ang farm schools nila Senator Villar. They are also TESDA accredited farm schools. So they send po ng mga scholars in TESDA mag-aral dun and they become better farmers and generating income.
We have also focused on program with the Gender Responsive Economic Actions for the Transformation of Women (GREAT Women) Platform in ASEAN. Also, the Productivity Toolbox that features various productivity training programs etc.
We have laid down tremendous and groundbreaking initiatives to achieve our goals of the inclusive growth. We want to see the micro become the small, the small - medium, medium to large.
MSMEDP Strategic Goal 4: Providing the Right Machines, Promoting Models of Negosyo (Technology and Innovation)
Aimed at increasing the productivity and improving the competitiveness of MSMEs within the priority industry clusters. We also provide the Shared Service Facilities. So parang ano to kung sa agriculture these are the tractors. Ito pinapaganda po natin ang productivity ng mga group of entrepreneurs normally cooperatives. Growers of calamansi, ‘yung mga calamansi processing plant, equipment. And now quality products of calamansi so mas higher value nila mabebenta ‘yung calamansi nila. So example ko po ‘yun. So let’s say for coffee roasters etc. So meron na po tayo ngayon na 2,448 SSFs across the country, 439 SSFs worth Php427M were established under the Duterte Administration.
Under this Project, we also provide machines and equipment through the Fabrication Laboratories (or FabLabs). Ito po ‘yung makakatulong sa mga Micro SMEs in mga 3D painting, mga paggawa ng mga prototype, scale models of their products with the help of technology. To date, we have already 19 FabLabs established nationwide under the care of select state universities and colleges (SUCs), the Philippine Science High School (PSHS) kasama dyan at mga LGUs and non-government organizations (NGO).
Technological upgrading assistance is also made possible through the continued implementation of the Department of Science and Technology’s (DOST) ang ating kapartner pagdating sa Small Enterprise Technology Upgrade Program (SETUP). Here, MSMEs are provided with technology intervention packages in the form of again ‘yung mga equipment and technical consultancy services and many more.
To date, more than 700 MSMEs have received innovation-enabling fund support to upgrade their technological capability. This contributed to around 40% average productivity improvement in their operations and generated more than 42,000 jobs.
Fulfilling the need for more intensified information product development, and technology match-making, we have successfully conducted three Pack! Pinas Roadshows in Cagayan de Oro, Tacloban, and Cavite. Dito we’re just have a limited budget. The Pack Pinas is our new program. Again, po ng DTI kung saan we are now making Micro SMEs together with packaging sources because you see the products of the Micro SMEs especially Micro entrepreneurs.
Tapos macocompare mo pag pumunta ka ng Thailand, Vietnam ang ganda ng packaging. The usual issue ng sarili mong order ng quantity requirement finally meron ng dagdag design. Design Center will help you on the design. Pagumoorder ng mga packaging materials there is always a order of minimum requirement -- 10,000 ,50,000 units etc. So how can they afford that? So with roadshow we are able to match them with more suppliers. Kasi suppliers also could be the source nung mga packaging innovations. So they can be exposed in new packaging.
And many of this in the OTOP. Makikita natin ’yung OTOP and andun na din sila sa Go Lokal. Kasi when they get to be improved, they get to be more marketable. As we say the consumers will buy your product not because you are a Micro SME product. Binibili po ‘yun kasi po they’ve seen great value on that product. Remember you’re not always there to sell your product. Pag nandyan na ‘yung product mo on the shelf ‘yun na ang magsasalita para sayo. So you can attract your buyer siya na ‘yung magsasalita for you. You did that to sell itself. Kaya nga napakaimportante ng packaging.
So related to the package assistance, we have implemented the One Town, One Product (OTOP) Next Gen. Through this initiative, we have assisted Micro SMEs, developed or improved 11,163 products, and generated Php1.9 M in sales. So ‘yung mga products na ‘yan we can see in the OTOP Philippine Hub.
Over 18,000 livelihood starter kits have been provided to entrepreneurs in vulnerable areas. Meron din tayong Livelihood Seeding Program. Ngayon, we support also Senator Bong Go’s program -- ‘yung mga nasunugan naghahanap ng livelihood starter kit. ‘Yung mga provincial offices natin nangunguna pag may sunog the day after nandun na sila tumutulong po sa pagbigay ng livelihood dun sa mga previous negosyo na nasunugan. At dito po, this program with the ROG – Usec. Zeny group, Usec. Boy with the funding ay nakadevelop po tayo ng mga disaster kit. Ito pong disaster kit ay also mga livelihood kit na binibigay ito dun sa mga Marawi rehab program natin, those affected by disasters and calamities, the Boracay, the resettlement areas in many parts of the city, the NCR. Kaya ho this is something din for us because again DTI has a limited budget for the kits. You know naman po wala kaming budget. So again we have to request some change in budget so that we can allocate. Kasi dun sa calamity lilikom pa kami ng budget para magkaron ng livelihood kit. So what we are trying to do is that we had inventory the livelihood kits to most requested so that every time there is a calamity they have the inventory that we can see. So that is another new program from us.
Also we have advanced our Bangon Marawi initiatives. To date, 11,537 internally-displaced persons (IDPs) have been given dressmaking, bigasan, sari-sari store, baking, carenderia starter kits since the Marawi siege in 2017. We have likewise awarded 8 SSFs to 8 cooperatives in Marawi. So under the group of Usec. Gani, RD Linda and the Mindanao RDs also helping us here. Palakpakan po natin sila.
To bring prosperity to the countryside, we have assisted 8,931 indigenous peoples (IP) and 32 tribal groups from 13 poor provinces to develop their products and integrate them in the mainstream market. So Asec. Aminah is our leader here. Also we recognize these tribal groups include Subanen, Samal, Matigsalug-Manobo, Higaonon-Bukidnon, Tilaandig, Kamigin Tribu, Mangguangan, Dibabawon, Teduray, and Mamanwa. Assistance provided include also skills training, introduced also in Negosyo Center briefing. Kasi the problem is many of these RDs, cannot go down to the cities or go to the nearest NC. So we are the ones going there to their communities. So ‘yun po ‘yung difference nung program na to. They don’t go to us, we go them. Again, limited by budget.
Almost 380,000 jobs have been generated by priority industry clusters. Ito naman ‘yung industry cluster approach. This strengthens dominant and emerging industries, as well as subsectors, sectors that demonstrate market and income potentials. Because of the industry cluster approach program, 379,216 jobs, Php9.1B investments, US$907M exports, and Php28B domestic sales had been generated.
Again, another initiative we’ve launched under the DTI Cluster Program or the industry clustering. So from coffee to farmers locally produced. But now we started the one in line store with RD Myrna sa CAR sa Baguio City. So we started the cafeteria, we want to multiply this into kiosk cart type so that we can put into our offices, all those government and even private offices.
Industry clustering is also seen in the RAPID. RAPID program is a plural outgrow entrepreneurship kung saan we link the agri farmers with the Micro SMEs. So we upscale, train, give inputs to the farmers then pag process ng Micro SMEs, which also with the technology. So all that is now integrated with RAPID program and we cover the areas of coffee, coconut, fruits and nuts. And dun sa fund assisted by IFAD and then we have other programs I’ll just discuss them next time.
‘Yung AFFI they help us with their commissaries to allow us to do mga franchise negosyo livelihood para anyone who would like to franchise ng little brother version nung big franchise pwede na magumpisa ng negosyo. So we have a Tokyo Tempura Jr., Sisig in the City Jr. mga ganun. It’s a new program that we will develop in coordination with our partners from AFFI. Kahit sino pwede magpartner dito.
MSMEDP Strategic Goal 5: Expanding Opportunities to Local and Global Markets (Access to Market)
Initiated by DTI in collaboration with select retail partners, we established nung mga Go Lokal!. This is a marketing platform may example po tayo sa Mezzanine. This idea here is in addition to the national trade fairs, my problem there is that is just a 3-day fair usually we get Friday to weekend --- temporary. But we’re looking for mainstreaming Micro SME products for free exposure. So we partner with retail stores, the malls -- City Mall, Robinsons, Ayala, Rustan’s to give us a free space for Micro SME products to get to be exposed for free. No need to pay rent. And these are contribution to being discovered. Kasi once they were discovered dyan na lalaki ‘yung negosyo na yan. So it’s like a trade fair 365 days a year. No rent. No listing fee.
So thanks again to our partners – City Mall, Rustan’s, Robinson, SM Kultura, Ayala Mall, Duty Free, Enchanted Kingdom, Shopwise and all those to be partners. We assisted 478 Micro SMEs na, available dyan sa Go Lokal!, 220 of which penetrated in the mainstream so nadiscover sila and mainstream na sila. 1,200 products have been developed and almost Php149M sales.
Now the Go Lokal! has also go global. So local to global. There will be a new brand kasi in abroad pag nilagay mo na Go Lokal, baka di associate, so we have to establish our own Philippine brand which is Marahuyo—a Tagalog vernacular word meaning “to be enchanted” or “to be attracted” so idedevelop ni Asec. Rosvi ‘yan so ilalaunch po natin ‘yan. We see this abroad, Inumpisahan ko sa Japan kung saan naman ‘yung grupo nila Usec. Rowel, Foreign Trade Service Core sila Francis, STR Dita -- we launch already a Go Lokal! branch in Japan.
We see brighter days ahead for the modern entrepreneur. We’re now more focus on training smarter, globally competitive Micro SMEs so we can really find now in the international market. This intervention is resolved under Duterte Administration we can have improve their competitiveness in business sustainability for them to become part of the global value chain. But challenges in SMEs remain, So disruptive innovations are happening, and the government must provide an enabling environment for Micro SMEs to fully tap their potential. What’s more, we must build more confident and competitive Micro SMEs. So we are integrating in all the Negosyo Centers many of the one digital transformation, make your business, to gain access also using commerce etc.
Along with the 7Ms Framework and the identified priority under our plan. The MSMED Council will push initiatives to support the plan’s vision. We will enhance the entrepreneurial mindset, the mastery and mentoring program, institutions that deal with the MSME and their concerns, we will strengthen them. So the MSMED Council, Negosyo Center, SB Corp., our partners in the private sector even when it comes to financing. Creation of more financial intensive modules. Introduction of alternative financial instruments. Formulation of an appropriate regulatory framework to allow more banks and financial institutions to cater to Micro SMEs. This will be lead by Bangko Sentral ng Pilipinas as our partner.
For the 18th Congress, we are pushing for the amendment of the Magna Carta for Micro SMEs and the enactment of a law that will institutionalize the P3 microfinancing Program.
The proposed amendments to the Magna Carta we will continue hopefully for the credit resources with the support of Senator Cynthia Villar. Also to set aside the 10% of the loan portfolio for lending to MSMEs. This will also provide an alternative compliance through lending by microfinance institutions (MFIs) and cooperatives. Amendments also to strengthen the SB Corp. both in terms of capitalization and exemption from BSP’s supervisory powers on quasi-banking operations. Lastly, hopefully maasahan natin ‘yung mga provision of free shelf allocation by private malls and supermarkets of at least 10% of their total selling area to qualified Micro SMEs. So again, pandagdag market access dito for SME products.
Government Procurement Preference for SME product services so para sa bidding, i-priority ang Micro SME products pati na supplier. Plus payment provision for SME suppliers para may bayad kayo kaagad at di na mabibitin ang working capital.
We assure you that the end goal of the enactment of the Magna Carta for MSMEs and P3 Bill would be very good in supporting more MSMEs, gaining more market access and promoting other models of Negosyo. As mentioned we’ve launched the franchise Negosyo sa Bayan.
The MSME development is the embodiment of our President’s "Tapang at Malasakit" program to help lift more of our countrymen out of poverty, and bring long overdue economic development to all the parts of our country.
By accelerating the 7Ms strategy for MSME development, I am confident that our economic priority agenda to achieve inclusive growth and shared prosperity for all will bring into sharper focus the areas of higher importance and greater impact for our Micro SMEs. And all this is aligned in President’s vision of uplifting our people’s quality of life for a better tomorrow.
Sa ngalan po ng MSME Development Council at ng DTI, maraming maraming salamat po sa patuloy ninyong suporta at paghahatid ng tunay na pagbabago. Mabuhay po tayong lahat!
Keynote Speech of Secretary Ramon M. Lopez, CDA Initial Findings and Policy Dialogue
KEYNOTE SPEECH OF SECRETARY RAMON M. LOPEZ
CDA INITIAL FINDINGS & POLICY DIALOGUE
30 July 2019, Edsa Shangri-La Hotel, Mandaluyong City
The Department of Trade and Industry considers cooperative as one of the many partners that support the development of the Micro SME – Micro Small and Medium Enterprises. We’re really very happy that CDA has been made and is now part of the family of the Department of Trade and Industry although I know they are operating quite independently. It is really getting to maximize the synergy between the CDA and the DTI in all these programs. Especially now that our thrust and of that of the Department of Trade and Industry, the challenge is how we can bring to the grassroots all the programs from the national government like our agency -- Department of Trade and Industry.
MSME as you know has been the front and center of the DTI’s program. It is also the priority of President Rodrigo Roa Duterte on how we can really change lives especially those who are at the bottom of the pyramid.
So many programs had been instituted even during his time and of course even prior to his administration. There had been programs that we started in partnership with private sectors like you know, the group I came from. And now in the Department of Trade and Industry we were able to sort of shift to the 4th gear already.
Many programs I might just sight a few of them it pertains to new programs like extending micro financing not by the Department but the Small Business Corporation, which is an attached agency. It serves as some kind of a wholesale fund concept that we get to distribute to all the credit delivery partners scattered nationwide. We have over 300 of them. And in fact, many of the cooperatives are credit delivery partners in this what we call Pondo sa Pagbabago at Pagasenso its literally translated fund for change and upliftment in life.
And so far, it is a Php 2 billion fund. This year we are getting another Php 1.5 billion, but still very low compared to the Php 30 billion target which we are trying to replace – the 5-6 system high interest rate or usurious system that we are trying to get rid of -- so we just had to replace it. So at least we are now working on our Php 3.5 billion although we had Php 2 billion as of 2018 we were able to lend out already to Php 3 billion worth of borrowings. And that means that we are able to roll over some of the funds already.
That’s just one, micro financing. The other program that we are really trying to push forward is the shared service facility. This is really provision of equipment again to the communities and many cooperators are cooperatives as well. Because the idea is to have this equipment shared to many entrepreneurs. Like a group of entrepreneurs working on calamansi, or Philippine lemon farm and giving them the equipment that will extract the juice and convert them to concentrates or juice products. So equipment that would be given for free use, for two years. In other words, the ownership does not get to be transferred to the cooperative but if the operation proves to be viable, the ownership after two years will be transferred. In other words, loan to be paid but really an equipment loan that can be transferred after two years.
One thrust also that our President would like to emphasize is really working towards the level of the barangay system – barangay is like the village level. And coming from a national agency, the DTI is structured way that -- we have 17 Regional Directors in regional offices. I think about 80 provincial offices. So are organized up to the provincial level but recently because of the Go Negosyo Law we are supposed to put up one Negosyo Center, which is a business center, for every municipality. We now have about 1,500 municipalities/cities and we [Negosyo Center] are now at about 1,072 so it’s quite a big number already. 824 of that were established during the time of President Duterte and we intend to complete hopefully before we finish our term by 2022, hopefully we are able to complete the 1,500 in terms number of municipalities/cities. In other words, covering all of them and conducting all these programs at the municipality level.
But as you know in each municipality, how many barangay? I think maybe 15 or even more. So our intention is beyond the municipality, to really even bring it down further to the bottom of the pyramid. That’s the intention of the department despite limited budget because our budget is up to the municipal level in terms of Negosyo Center.
But such is the passion and drive for the Department to reach out to all Filipinos and that’s the reason why we hope that the CDA and all the cooperatives would be partners in making this a reality. Just listening, I think the last chart, probably says it all when it comes to trust and the good image, and reputation of cooperatives, just work on professionalizing the cooperative system.
Again, let me just reiterate the cooperatives at the grassroots level help their members who are Micro SME by providing them with organization access to capital. These entrepreneurs are going to contribute to our country’s inclusive and sustained economic growth particularly in the rural and agricultural areas.
Aside from the micro financing, we’re giving extra emphasis on training and mentorship. We believe that any Micro SME and even cooperative members who are into Micro SME work, for them to be successful they really to have mastery, there has to be a change in mindset. From being employment-employee mindset or just a microentrepreneur mindset to one that is really an innovative entrepreneur kind of mindset. One that will really look for innovation, spotting opportunities, the gaps in the market and to serve market and all that and of course having a positive attitude etc. because such is the mind that is needed for a business to be sustained and prosper.
It’s easy to establish a business we all know that but to sustain that is the challenge and to even grow it, and to sustain it to many more years. We want the Micro to be smarter entrepreneur as we say. So Micro to become Small, Small becoming Medium and eventually the Large. Some indications, we’ve look at statistics compared to about four years ago we’ve seen the Micro entrepreneur share. You all know that the total is 99.6% Micro SMEs out of the total so .04 only for large. But between the Micro and the Small, the Micro used to be in the 90% and about 8% Small. Now, over after four or five years we’ve seen the Micro going down by about two percentage points and Small getting to be around over or increased by 2 percentage points. So the presumption is that some Micro are already becoming more Small, not smaller, but more on the small category. So, the Small hopefully eventually become Medium because we just want to build many Jollibee’s and Mang Inasal or all this small business getting to be big and then creating more jobs and really helping solve the poverty problem.
Of course at the Macro, you know that poverty at least has gone down from 27% to 21%. 27% in 2015 to 21% as of 2015. But the administration would really like to still bring it down further to 14% or even lower, and key really is -- grassroot level empowerment. And this is where DTI and CDA can really work closely.
So aside from mindset, one of our big programs is making sure and as mentioned creating a smarter entrepreneur. Making sure that there is Mastery of Entrepreneurship. So at least knowing to differentiate product, branding, right packaging, product development, even a bit of financial literacy. And of course with continuous mentoring that is our 3rd M. Mindset, Mastery and Mentoring. I’ve mentioned Money the P3 program – micro financing. I’ve mentioned the Machine so what else. Different Models that we can offer. Models of businesses for those who cannot think of a model. The franchising, direct selling and other models that one can get into so at least one can get a livelihood or you know -- source of income.
But more importantly, when one has a product, we have developed the last M -- one of the most important M is also the Market access. We make sure that these products really get to have that exposure. So, Market access making them available in key market areas like malls and supermarkets for free, given free exposure. And many success stories had been mentioned or reported to us because of their exposure in those programs like the Go Lokal! program which is really a market incubation program. Literally a store tied up with malls and they are in the ground floor, high foot traffic, about 15 to 18 square meters and all the MSME products getting the exposure for free, no charge. Many get to be discovered there, eventually volume orders would follow and that is again the start of their growth. If they need more funds they go to the micro finance program that we have. So, it’s a kind of 360-degree program that we have.
We thank the OCDC for the presentation, sharing the numbers and the findings. We hope that all these numbers can help guide us, policy makers as well as the program developers as we strengthen the role of cooperatives as well as maximizing their role in really allowing us to empower the bottom of the pyramid. As we say we empower the bottom of the pyramid we empower the nation. And that is the vision of President Rodrigo Roa Duterte.
Thank you very much and good morning!
Congratulatory Message of Secretary Ramon M. Lopez, Official Opening Ceremony of John Rothwell Assembly Bay
CONGRATULATORY MESSAGE OF SECRETARY RAMON M. LOPEZ
OFFICIAL OPENING CEREMONY OF JOHN ROTHWELL ASSEMBLY BAY
24 July 2019, Balamban, Cebu
Ladies and gentlemen, magandang hapon sa inyong lahat.
I’d just like to say that this is really an exciting day for us Filipinos, for us promoting trade and industry in the country, promoting investments in the country.
I will start where the governor ended. I would like to really thank Austal Philippines for really believing in the Filipino, the capabilities and all the positive attributes. Normally, if we talk about foreign investors, we hear those positive traits to the point that they’re becoming rhetoric. Highly-educated, easily trainable, honest, creative. But really hearing from the investors themselves gives us a feeling that they’re for real. They are really citing positive factors to them why they chose the Philippines.
This is really inspiring. I had about a two-minute speech with the President. I was lucky to have with me pictures of the high-speed patrol boats and so many beautiful ships being built by Austal. Of course, a lover of all these boats and military equipment, our President really was impressed by these pictures.
And I was saying to the President, Mr. President, all these high-tech, high-speed patrol boats are being done here in the Philippines by Filipino workers. Filipinos are so good in fabrication that they only needed help in design engineering and that is what Austal provided. You are helping us elevate skills of the Filipino workforce. And that to us means a lot. That is really the pride and joy of the Philippines—the Filipino workers themselves.
When the President learned that these are done in the Philippines, right here in Balamban Cebu, he got excited. He said that, hey, we should have these ships in our Philippine navy. I guess you just have to go through the regular bidding process, but I am sure that there is really an advantage of getting the boats from local manufacturers.
Obviously, it creates jobs and creates a lot of income opportunities around the town and around the country. I’m also looking forward to OPVs (offshore patrol boats) coming from Austal. Of course, subject to the usual bidding process.
But the good thing with the President is that you can always hear him say that contracts should not be awarded just to the lowest bidder. We have several meetings to hopefully change this. It should be the specifications, quality, brand-based bidding and having a lowest bidder based on those quality and brand. That is what we’re really aiming for. Hopefully we would have that changed and really give more premium and preference for those who can give high quality equipment, vessels, or anything that we need.
The Department of Trade and Industry (DTI) fully supports Austal and the Philippine shipbuilding industry as they contribute to our drive to expand our manufacturing base by building more ships locally. You don’t just build our domestic capacity. You also build our capacity to export and improve the country’s balance of trade position.
There are huge opportunities in the shipbuilding industry, especially every time we meet, I ask David how is the local content contribution? You’ve cited that it is increasing, the last time it was 15, but I think you want to bring it closer to 20, 30, even up to 50% local capacity. You have given a lot of jobs, close to 1,000 and with your investments, this would be a big boost to increasing domestic capacity that will help us in the balance of trade.
As of 2018, the Philippines is recognized as the 4th largest shipbuilder in the world, and thanks to Austal for being part of it. Total employment in the industry is estimated at around 50,000. We have 119 shipyards and 167 shipyard facilities across the country, but we can only cite the big ones and Austal is one of the big, modern, high-capacity facilities.
Even as President Rodrigo Duterte himself has lauded the ships made in our country, we take inordinate pride that many of our countrymen are working in the industry. But we admit that there is a need to broaden their shipbuilding skills and knowledge in terms of design and operation, and we are hopeful that further training can help in this regard.
Meanwhile, the Inclusive, Innovation-led, Industrial Strategy (i³S) includes Shipbuilding among our Top 12 Priority Sectors that we will grow and develop into globally competitive and innovative industries. We will also strengthen their linkages into domestic and global value chains. Lastly, we have a Manpower Development Plan for the shipbuilding sector that we’re coordinating with the Technical Skills Development Authority (TESDA) and other technical vocational institutions that can help train, just provide the basic training. And Austal can pass on the curriculum and module that can be passed on to workers.
We are grateful that with Austal’s expansion of their Balamban shipyard, we can continue to improve our shipbuilding industry. We are already thankful that their investment of that will increase our country’s Foreign Direct Investments (FDI).
In closing, we hope that this greater collaboration between the Philippines and Austal will result in more ships—including patrol ships and advanced high-speed ferries—being built locally. On the government’s part, let me reiterate the promise of the President that there will be no corruption under his administration and that we will not tolerate any harassment of investors. As President Duterte said, your investments will be protected here.
More importantly, the Filipino people will gain a better quality of life through the jobs and employment opportunities created by Austal’s investments and expansion. To this end, we are all fulfilling the promise made by President Duterte’s vow of Tapang at Malasakit. That is bravery and concern for others. Salamat po at mabuhay tayong lahat.
Keynote Speech of Secretary Ramon M. Lopez, P3 Credit Delivery Partner Forum
KEYNOTE SPEECH OF SECRETARY RAMON M. LOPEZ
P3 CREDIT DELIVERY PARTNER FORUM
25 July 2019, PICC
This program is really a brainchild of the President. During the first few months of his Presidency pa lang, when we were doing a Presidential visit, I remember the usual President Duterte he calls a meeting 11pm 12 midnight. So after the meeting with the Filipino community, so we were gathered in one room those who joined that visit and it’s usually a brainstorming on what can we do for the people.
Actually we started with his desire to really help the bottom of the pyramid. ‘Yun talaga very sincere ‘yung kanyang call to help those who have less in life – the marginalized group.
This particular example, while a mayor before, he would use to drive incognito -- taxi driver noon doon sa Davao. You heard the story. He’s been seeing mga palengke vendors 2am 3am really looking desperate but of course we would see them facing their paninda.
And I was wondering di ba saan nangagaling ‘yung puhunan nila and we all know ‘yung puhunan talaga nila karamihan galing sa 5-6. And you know the rates of 5-6 and sabi nya talaga during our brainstorming is that we really have to kill the 5-6 and really come up with a program. Di mo naman pwedeng just stop the 5-6. And especially as you know, one particular nationality ang sikat sa 5-6. Di ko na i-identify kasi maraming guilty sa 5-6. It’s not only them. So the point is, if we are to stop the program there has to be a replacement. So we thought about to come up on a program. There have been a lot of micro finance programs before and partly based on reports, they have not been successful. Medyo ‘yung iba na-politicize or napunta sa iba ibang group. In other words, repayment rates were very bad.
So when we were crafting the concept we said that for this to try immediately with high retainment rates, we have to partner with guys like you. The MFIs, the cooperatives, the wet market vendor association because you would know your members or you would have a better understanding of the situation at the grassroots because you are already there. And so we want it to really spread this immediately.
If government, we still have to create the infrastructure. Maghihire pa tayo ng opisina, ng tao. Talagang it will take years and so we rely on partners like you. So actually we’ve done a lot of programs always with in partnership. That’s why orientation coming from the private sector always partnership with the private sector.
And so I think immediately even just on the first 6 months of the program, P3 when it was starting ang bilis ng implementation and deployment. And with the help of course support of Usec. Zeny Maglaya and at that time wala pa si Pres. Luna but a former President we have to give credit, tumulong siya siyempre sa pag-umpisa nitong programa na to.
And right on this time ang bilis nadeploy and we’re so happy with the implementation. Of course, there will be improvements, refinements in the system, the conduit system became now a credit delivery partner system and that is through the initiatives nila Pres. Luna and Melvin on how we can really improve further on the delivery of the service.
There’s still some questions on why 2.5 percent monthly. Obviously I’ve always defend it, that’s a lot lower than 20% per month or maybe per week coming from the 5-6. But we have to cover for the operating cost etc. People their collecting every day, every week or disbursing the loan. So may reason din kung bakit ganun ang rate.
And that’s also in line with market determine rates. We don’t want to compete also with the existing MFIs di ba? So that’s the idea. But we see if you want to supplement and fast track the disbursement of loans especially to those in need. I must say we are successful enough. So far we’ve lend to almost 90 thousand, 89 thousand plus and over 300 credit delivery partners. So many good numbers. And despite the Php 2 billion pa lang ang naibigay sa pondo na to – Php 1 billion in 2017, Php 1 billion in 2018, napatakbo na natin and the loan has come up almost to Php 3 billion pesos.
Ibig sabihin, the money has been returned and has been redeployed Php 3 billion ‘yung lending level even Php 2 billion palang from same capital. And for 2019, with the help of Sen. Pimentel, may additional na Php 1.5 billion ulit. That is to allow us to lend out to more CDP’s – credit delivery partners so that’s the idea. And hopefully, we’re able to multiply the 90 thousand that we have right now na naabot .
And I think credit to all of you because isa po sa nabanggit ni Presidente nung SONA ‘yung Pondo sa Pagbabago at Pagasenso at ‘yun po ay dahil sa inyong lahat . Salamat po sa inyo. Binalita po ‘yung 86,000 pa ang nabanggit nya nun because that was I think the end of June report but pero tuloy tuloy pa din mabilis ang pag-akyat. So salamat sa inyo for really your support there.
Now, really what’s important in the P3 is the fact that we are able to change lives. ‘Yun po ang gusto ng ating Pangulo na ‘yung mga nasa ilalim talagang magbago ang buhay nila and we’ve cited many examples with the help of media, some advertisement featuring the beneficiaries. So ang ganda ho, very inspiring which really touch the lives of many.
I guess those 90 thousand borrowers would have their own respective stories and it’s really inspiring. Nagbago ang buhay. Si Tatay Oly na shoemaker dati ‘yung kwento nya pinuntahan namin. Tatlo ang 5-6 pinagkakauutangan niya. He was borrowing from three 5-6 lenders. Then he got the P3. He was able to distinguish all those loans and now just borrowing from P3 na sya. So isa na lang at mababa na ‘yung interest.
So like those are very inspiring. The widow of slain combatant in Marawi, natuloy nya ‘yung pangarap nya having a grocery store. Dati sari-sari store lang maliit na pwesto. Now, she was able to expand it.
Even the palengke vendor in many places. ‘Yung maliit na pwesto napalaki kasi imbis na interes sa 5-6 napupunta sa paninda – greater working capital. So lot of just miracles or success stories. So with that, we’re very grateful to all of you for being a partner. And of course, we want to grow this moving forward with the help of technology. We want to use the PesoNet and lahat po ng prinisent ni Central Bank Director Deputy Director Dizon para ho we can really propagate this loan much further.
The digitalization is definitely the way forward. The President has emphasized Ease of Doing Business in the last SONA. I think he mentioned it three times. So Ease of Doing Business is really putting everything online – putting everything in the smartphone.
If a borrower can really lend from the smartphone and get the money smartphone din and payback using the smartphone that’s the Ease of Doing Business.
We’re trying to do the same in registering a business. Starting a business, smartphone na rin ‘yan eventually. So hopefully, may project na kami ngayon, I can see the prototype – it’s possible.
We’re now doing the beta format wherein when you register in DTI, SEC, the BIR, Mayor’s permit, the Pag-ibig, Philhealth, SSS – everything in that one form for that business and all of those agencies in that one application form. Section by section. You will get fairly automatic approval especially for less complicated, low risk businesses.
So we are doing that so that at the end of that filling out activity – so you file, you submit and then you pay dun na rin. So may Instapay at PesoNet na dinidevelop. And after that you print. So you print now a business permit. So that’s the end goal there.
And if you want an original format, that’s the time you go to the Mayor’s office to get your business permit but it’s optional. So that’s a work in progress that’s we’re now having. And hopefully that for the P3, digital transformation is the way forward – no other way.
‘Yun pong kaninang sinasabi ni Dir. – as ‘yung center receiver, ‘yung iba receiver na. Di pwedeng maging receiver siya all the way. Talagang magko-convert na ‘yun because maiiwan siya. So it’s really not only just to be competitive. It will be the new norm moving forward.
So allow me just to again to emphasize ‘yung pasasalamat sa inyo at this point. And really just encourage you to get more involved, get bigger amounts so that you can lend to more, fix your systems, let’s just make it foolproof.
Congratulations on high repayment rates and let’s just make this work. At the end of the Administration of the President Duterte by 2022 talagang we will be able to reach out to billions already of borrowers because remember the P3 is supposed to replace about Php 30 billion worth of 5-6. So we are far from that. We are just on the Php 3.5 billion. So this year, Php 30 billion ang hinahabol natin na palitan. But the good thing also is that as we are present in some areas -- tayo ang magiging benchmark. ‘Yung 5-6 balita namin from 20% a month binababa na nila to 5% . I think we’ve been hearing feedback from that one. So it’s creating a -- you know a competition. And that’s good for the people. So dun pa lang we are able to help.
So again, thank you once again and more power to all of you.
Magandang umaga po!♦
Keynote Speech of Secretary Ramon M. Lopez, 2nd Logistics Services Philippines Conference
KEYNOTE SPEECH OF SECRETARY RAMON M. LOPEZ
2nd Logistics Services Philippines Conference, 15 July 2019
PICC, Pasay City
Thank you. Maraming salamat po. I am very humbled by the turn of events. But really, I must say that the President was just pressured to identify the three, but all Cabinet Secretaries are really top performers. Kaya palakpakan po natin ang buong Gabinete. We’re working as one team in pursuit of the vision and goals of President Rodrigo Roa Duterte, which is improving the lives of all Filipinos. Nagkakaisa po kami d’yan.
Good morning to our logistics service providers, our micro SMEs, all the panelists and speakers, fellow workers in government, the DTI officials, regional and provincial directors who are in the hall. I must also thank Undersecretary Aldaba for a very futuristic message. And a very comprehensive update on the 10 Commitments, maraming salamat po, Ms. Alberto. And to all our friends, our distinguished guests, magandang umaga po sa inyong lahat.
Allow me to welcome you to the 2nd Logistics Services Philippines Conference, just seven months after the first Logistics Conference where we gathered all the stakeholders in this service industry. I was just telling some guys earlier, ilang taon na ang negosyo sa Pilipinas, but it’s just now that we’ve gathered all the stakeholders in the logistics industry. Only last November for the first time. Really, thanks to all our friends in the logistics sector, lahat po ng nandito, palakpakan po natin.
We’re just so happy that the DTI has been an instrument and we continue to be your partner in government, together with the Department of Transportation (DOTR) and the Department of Finance (DOF), and the Bureau of Customs (BOC) under its wing.
Speaking of the need to move ahead, we decided to transfer the 2nd LSPH Conference from December to July to allow the sector to concentrate on your business since the Yuletide season is your busiest time of the year for the industry.
Also significant is that we are holding the 2nd LSPH back-to-back with the MSME Development Summit to be held tomorrow in the same venue. This is in line with one of our advocacies to encourage our micro SMEs to focus on their core business, and to allow logistics service providers whose business is to deliver your goods to your customer at the right time, at the right cost, in the right form, as well as reliably, and worry free.
We are also confident that the 2nd LSPH exhibition is the venue for that, as we aim to bring logistics service providers closer to their potential clients—the micro, small and medium enterprises which will be attending the summit tomorrow. So the exhibits will also be around tomorrow.
Ultimately, this is for the Filipino people. By improving the logistics sector, we ensure a better business environment. This in turn impacts the ease of doing business in the Philippines. As well as lower the business costs. This means lower consumer costs as well for our people which give them better value for money. This helps give realization to the promise of President Rodrigo Roa Duterte, Tapang at Malasakit para sa ating mga kababayan. This is a government that is responsive to its people by helping them live better quality lives.
ABOUT THE 2ND LSPH
I am told by that the 2nd LSPH conference and exhibition is bigger and better, as it generated significant interest. Both events recorded more registered participants compared to last year.
I urge you to visit the exhibition at the mezzanine which showcases the entire logistics services sector–-from inland transportation, warehousing, cold storage, customs brokerage, freight forwarders, shipping and air cargo, including I.T. companies that provide tracking and tracing.
Before we look forward, let us look and appreciate the work that has been done. Though this has been presented point by point by Ms. Alberto earlier. This began from the time the private sector and government made a pact we now refer to as our “Ten Commitments”, as reported by the Ms. Alberto there had been notable movements.
We are guided by global rankings.
● In the 2018 edition of the Logistics Performance Index (LPI) of the world bank, our country’s logistics performance improved when the Philippines’ rank increased 11 notches from 71th place in 2016 to 60th out of 167 countries last year. While we were listed in the World Bank Logistics Report as one of the top performing lower middle income economies, the country’s overall ranking still lags behind other asean economies. This means we still have a lot to do. Because as everybody knows that our global competitiveness depends on our ability to manage logistics in our business environment.
● A closer look of the logistics report will reveal that the Philippines fared well in terms of ease of arranging competitively price international shipments, and in tracking and tracing. However, we still need improvement in customs, infrastructure and logistics quality and competence and timeliness.
● More importantly, the Philippines has the highest logistics cost in the region. This was reported earlier. In the Philippines, the average logistics cost of local companies consist of 27% of the total sales as compared to Thailand (11.11%), Vietnam (16.3%) and Indonesia (21.40%). If you notice, Indonesia and Philippines have logistics cost over 20%. And I would say that this partly due to the archipelagic nature of our countries. Although this challenges us to break down the content so we can address the issues still at hand.
Thus, DTI worked closely with industry representatives on reforms to reduce logistics cost, to make doing business easier, to address our human capital requirements, and many more. Some of these have been mentioned earlier, but let me emphasize all these programs. You will be hearing a lot of updates about the Build Build Build. Infrastructure definitely is one key area that needs to addressed to lower the logistics cost in our country.
Inefficient infrastructure definitely adds to the problem. So, the Build Build Build program is a key program in the Duterte administration’s priorities and therefore, we’re just happy to report that last week, in this hall, updates on the Build Build Build program, reported by Secretary Mark Villar.
Really, you will be proud to be a Filipino when you see a lot of these infrastructures moving ahead. Roads, bridges, ports, there’s a video. I’m sure you can Google the video. It’s a proud moment because in just a few years, you can see all these programs moving ahead. You can see actual videos of the progress, these are not architectural perspectives. You see roads being built and bridges being inaugurated.
Ms. Alberto also mentioned that Secretary Art confirmed his attendance this morning. But I also got a text that said that he will not be able to make it. He was supposed to go to Cagayan de Oro to inaugurate these DOTR projects. I told him, Sec. those are really very important, kindly prioritize those. Those are big projects in logistics and also bringing comfort to the lives of many Filipinos.
‘Yun naman po ang gusto ng ating Pangulo, ang matanggal ang paghihirap, ang hassle, forming lines, inefficient port services would have to be addressed, passenger terminals. These are all being addressed, one after the other. So DOTR Sec. Art has been going around the country, pushing through with all these projects. Palakpakan po natin ulit si Sec. Art.
Now, the JAO has been mentioned. The Joint Administrative Order to address high shipping costs and port congestion. As we move, I signed it and Sec. Tugade also signed it. As we move with the signatories, I have also instructed Undersecretary Rowel Barba and Assistant Secretary Jean Pacheco to reconvene the technical working group of the DTI, DOTR and the DOF. The purpose, really, is to reconstitute the JAO into an Executive Order.
We believe that we need to address the institutional arrangements required to regulate high shipping costs, and address the problem of port inefficiencies and legal basis must be clearly established. Kaya po naisip namin, baka ‘yung JAO kailangan pa ng ngipin. And therefore it must really be an executive order that will allow us to implement in greater force, the provisions in the JAO. ‘Yan po ang aming latest decision d’yan. That is just to update you that we will submit a draft Executive Order on this.
On ease of doing business, it was reported that the law was signed last year and there’s a new Director General, Atty. Jeremiah Belgica. His appointment will pave the way for the issuance of the Implementing Rules and Regulations (IRR). Technically speaking, we already have the IRR, but it has to be officially issued by the Director General.
But I’ve been saying all along that the law has been in effect since it was signed. It’s a self-executory law. In fact a lot of the cases have been submitted to the DTI, ARTA, and the Civil Service Commission. In fact, there was a report last week that I think, more than half of these complaints have been addressed.
Those who have been surpassing the limits of 3-7-20 days (3 days for simple transaction, 7 days for complex transactions, and 20 days for highly technical transactions). If you really go beyond the 20 days, you have the right to complain. You just have to file a complaint. You can also file a request, and if you present this to the concerned agencies, these agencies really move. They know that there is really this law watching them. The law has to be implemented by the citizens and stakeholders filing complaints. That is really how it works, even if the IRR is already there.
Especially, there is one provision, the Citizen’s Charter, where all the documents listed will have to definite. In other words, all the documents required in your application are there. They can’t tell you that you still lack documents, tapos pabalik-balik na. Bawal po ‘yun and that’s also grounds for filing a complaint.
The issue also for those starting a business, asking you to buy fire extinguishers. Bawal na ‘yun. And there’s a penalty. It has a two-strike policy. Suspension first instance. Second instance, termination already. At may kulong pa, etc. I-implement po natin ‘yun.
Also while the ARTA seeks to implement EODB reforms, may I report that the MSMED council, in support of the EODB Act’s whole of government approach will prioritize 5 sectors that will adopt a horizontal and industry approach to streamlining. These are electronics, chemicals, food, furniture, and logistics services based on our initial inventory: A trucker to operate his business needs to transact with 14 government agencies, apply for 19 permits, and submit at least 126 supporting documents.
These will be streamlined and eventually automated. That is the end goal. The DTI's competitiveness bureau has been directed to continue promoting ease of doing business in these priority sectors by actively pursuing reforms to encourage all concerned agencies to reduce the time, cost, and steps taking into account the provisions of the EODB/Efficient Government Service Delivery Act of 2018.
More needs to be done. DTI expects the demand for logistics services to grow exponentially due to growing urbanization, increasing consumer base and our young population’s aspirations.
Our country needs a comprehensive policy–not just in transport, infrastructure, but a strong governance structure with the capacity to execute.
Our vision is towards seamless logistics. Admittedly, this is complicated because we are an archipelago and our population is far greater than our neighbors (except perhaps for Indonesia).
But we need to hurdle our domestic challenges then leap towards economic competitiveness in the era of the Fourth Industrial Revolution. We need intelligent industries must be supported by smart logistics.
To this end, the government has adopted an Inclusive, Innovation-led, Industrial strategy (i3S), which is government’s industrial policy geared towards achieving inclusive and sustainable growth that generates more opportunities for employment and entrepreneurship in the country.
i3S aims at growing innovative and globally competitive manufacturing, agriculture, agribusiness, and services while strengthening their linkages into domestic and global value chains with innovation at the core of the country’s strategic policies and programs.
It must be emphasized that under i3S, transport & logistics is one of the 12 priority industries. A reliable, innovation-driven, and efficient logistics services serves a vital role in promoting productivity and competitiveness in the manufacturing, agriculture, and services sector.
To all our participants here today, we hope you will find today’s conversations informative. I am sure the afternoon sessions will give birth to good ideas.
The conference was designed to spark conversations that will trigger action on what the country needs to do to. These include:
1. Improve logistics performance. Let’s drill down why we have 27% of logistics cost in sales.
2. Gear up the logistics services sector to support Industry 4.0, particularly our micro, small and medium enterprises
3. Maximize opportunities as we encourage digital transformation
I wish to underline the importance of this event by quoting Young Tae Kim, the Secretary General of the International Transport Forum who said that a well-functioning domestic and internal logistics is a precondition of national competitiveness.
During the 1st LSPH, Dr. Henry Basilio estimated the amount of investments by the government and private sector to reach PHP6.5 trillion in a span of five years. These investments are expected to generate 220,000 jobs. That’s why we invited the country’s top conglomerates today, which in recent years have made substantial investments in the logistics sector.
Our country is still supposed to be private sector driven. All these are investments are taking place already. We just need to consolidate, align, and complement each other. We need also to synergize these investments so that we move faster and efficiently move forward.
We want to hear their plans and find out how their strategic expansion will benefit their company and the country in general. We have invited representatives from these conglomerates. I thank these companies who have given their time and accepted our invitation today.
In the advent of Industry 4.0, government and private sector needs to gear up for the future. Hence, allow me to also thank our panelists from here and abroad who are here to share “whats out there”.
The government and the private sector have laid the groundwork for the transformation of a logistics services sector that is globally competitive. We have noted our accomplishments on the reforms we set out to do under the Ten Commitments, and I promise you that we will move much faster in this second round. And we thank our partners for making this happen. I want to restate the DTI will be a committed partner in this sector in taking action in these Ten Commitments.
As the new age of industrialization shapes the future of logistics, we recognize the pivotal role of logistics services sector in ensuring seamless logistics and efficient supply chains. Let me reiterate the formula to achieve our goals: Intelligent Industries + Smart Logistics = Productivity and Competitiveness.
Let us join hands in making seamless logistics in the Philippines a reality. This will lead to our goal of an interconnected nation with inclusive growth shared to our people, throughout the country. Especially to those at the bottom of the pyramid. Our President always says everything we do, para ho sa tao. Hindi ho para sa negosyo natin. Dahil kapag masaya ang tao at mas mayaman, sigurado hong mas progressive din ang ating mga negosyo.
Thank you at mabuhay po tayong lahat.
Keynote Speech of Secretary Ramon M. Lopez, 7th Philippine Electric Vehicle Summit
KEYNOTE MESSAGE OF SECRETARY RAMON M. LOPEZ
7TH PHILIPPINE ELECTRIC VEHICLE SUMMIT
17 July 2019, SMX Convention Center, Mall of Asia, Pasay City
Ladies and gentlemen, good morning!
First, let me congratulate the EVAP for continuing to hold this summit, which serves as an important platform for stakeholders to discuss relevant topics and concerns of the EV industry.
EVAP has been a steadfast partner of the Department of Trade and Industry (DTI) and the Board of Investments (BOI) in the past few years. They’ve been working with us to push the development of the local EV industry, from establishing an industry roadmap to partnering with us in lobbying for the various policies and programs for electric vehicle industry.
It is this strong public and private sector collaboration that will help us to realize the EV industry’s potential. This, in turn, will contribute to our goal of climate resilience, energy security, and sustainable growth. Our goal is that by the year 2022, we envision a clean, green, and sustainable Philippines with a robust EV industry.
Future of EV Industry
Speaking of goals, at a meeting with South Korean companies last month, we raised the idea of the Philippines being the regional production hub for e-vehicles in the future. And I must say that Usec. Mark already mentioned that if there is a percentage or a quota where e-vehicles should be part of government procurement, hopefully, there should also be a percentage that is locally-sourced for the manufacturing of e-vehicles.
If we are to achieve this goal, we must have a special program like what we have now, the Comprehensive Automotive Resurgence Strategy (CARS) Program, that will give specific support to the industry and the entire value chain. From parts to assembly, to the market, the entire ecosystem that can induce even the demand.
The Philippines being a regional production hub is not an impossible goal to achieve as our EV industry holds great promise in a booming e-vehicle global market. The sale of e-vehicle units is increasing globally with 2.1M sold worldwide in 2018.
In the Philippines, there are presently over 4,300 registered e-vehicles, a definite increase from 2016 when there was just more than a thousand. There are also now around 19 charging stations concentrated in Metro Manila. So obviously, that number will have to grow. This is, I guess everyone will agree, an industry where there is nowhere to go but up.
The industry itself has around 46 players. These are composed of: 20 local manufacturers and 8 foreign ones; 11 parts and components manufacturers; and 7 importers, dealers and traders, as well as service providers.
Capable of producing a wide range of e-vehicle products, the industry has a production capacity of over 100,000 units a year. What’s more, they employ around 15,000 people from the auto-supporting industries.
The Compound Annual Growth Rate (CAGR) of this industry is 61% and they have a project cost amounting to over Php750M. While we already have major players in the industry like Bemac, Tojo Motors, PHUV, and Star8, new ones are entering the market to add new capabilities to the industry. We now have QEV Philippines setting up fast-charging stations for EVs, as well as Le Guider International manufacturing e-cars, e-jeepneys, and e-trikes locally.
Given the growth of this industry, the government is committed to support the development of the EV industry. Our efforts range from fiscal to non-fiscal incentives, as well programs and policies.
Under the Omnibus Investments Code of the Board of Investments, this is part of the 2017 Investment Priorities Plan (IPP), qualified manufacturing activities—including the manufacture of EVs and their parts—are one of the priority sectors that may be given incentives. Also included are the establishment of charging/refueling/swapping stations for alternative fuel vehicles.
Under our Motor Vehicle Development Program (MVDP), there is a reduction of duty rates of 0% for imported parts and components for the assembly of alternative fuel vehicles. We’ve also included EVs in the proposed MVDP 2.0 framework, and preferential and differential treatment in terms of incentives may be given to EVs and their development.
Lastly, Executive Order (EO) 488 series 2006 provides zero tariffs for e-vehicle components, parts, and accessories for the assembly of hybrid, electric, flexible fuel, and CNG motor vehicles through the MVDP.
For programs and policies that are open to the EV industry, there is the PUV Modernization Program, which takes into consideration the inclusion and participation of qualified EV eco-PUV units.
However, we should ensure the safety and reliability of these EV eco-PUV units. As such, we are proposing that EV companies that don’t have OEM global sales track record require a certification from the Department of Science and Technology (DOST) on product safety and reliability.
The automotive industry—which includes e-vehicles—is one of the 12 priority sectors considered under our Inclusive Innovation Industrial Strategy (i³S). This strategy aims at growing innovative and globally competitive manufacturing, agriculture, and services while strengthening their linkages into domestic and global value chains.
Evidently, if you are part of this priority industries identified in the i³S, these will be given support. Through the EV Industry Roadmap prepared by EVAP, BOI has been working with stakeholders and other government agencies to come up with strategies to further develop the industry.
These include improving the business environment in the Philippines for this industry, including the development of standards for EVs. The latter is currently an ongoing initiative under the guidance of the Bureau of Philippine Standards (BPS). We are also crafting registration procedures for EVs with the Land Transportation Office (LTO) and pushing a draft of the aforementioned Alternative Fuel Vehicles bill.
However, DTI is establishing its own Philippine EV and Other Next Generation Vehicles (xEV) Roadmap as well. Through a whole-of-government approach, this roadmap aims to build our EV ecosystem and encourage EV adoption in order to address severe air pollution and its threats to public health. At the same time, it will promote EV and xEV manufacturing, as well as the building of charging infrastructure.
To establish this xEV ecosystem, there are 5 key elements: Regulatory Framework; Incentives and Industry Development; Innovation and R&D; HRD and Training; and Information, Education, and Communication.
Partnerships and collaborations with government agencies and stakeholders both here and abroad will help us sustain our efforts to develop the EV industry.
For example, DTI-BOI had partnered with Japan’s New Energy and Industrial Technology Development Organization (NEDO) for the Mobility as a System (MAAS) Project. This project, which was concluded in the third quarter of last year, involved the introduction of EVs and the necessary technologies for EV utilization through a demonstration. In this case, 50 units of BEMAC’s e-trike were deployed in Intramuros, Manila to provide public transport services at an affordable price.
Speaking of MOUs, DTI signed one with South Korea’s Ministry of Trade, Industry and Energy (MTIE) for bilateral cooperation in the EV industry. EVAP signed one as well with the Power Battery Applications Branch of the China Industrial Association of Power Sources (CIAP-PBA) to explore battery production in the Philippines.
Furthermore, BOI is implementing capacity building programs for our motor vehicle industry with the Japan International Cooperation Agency (JICA) and the World Bank-International Finance Corp. (WB-IFC).
On a last note, ongoing negotiations between the Philippines and South Korea for a Free Trade Agreement (FTA) may help the EV industry by supporting potential investment in a local battery industry, thanks to our nickel and copper resources. We’re hoping that this FTA will be concluded by November of this year during the ASEAN-Republic of Korea Summit, where we hope to see President Duterte in Korea to visit President Moon.
To conclude, I am hopeful for the Philippine EV industry, thanks to the strong public-private sector collaboration and the whole-of-government approach being applied to support it.
This is the realization of the promise of Tapang at Malasakit given by President Rodrigo Duterte: that by empowering our people, they can create a better life—and future—for themselves.
Thank you and mabuhay tayong lahat.
Keynote Speech of Secretary Ramon M. Lopez, hAFFI Bootcamp
KEYNOTE SPEECH OF SECRETARY RAMON M. LOPEZ
9 July 2019, Calamba, Laguna
Magandang umaga! Good morning!
I’m really “hAFFI” to be here this morning kaya nga ho iniwan ko na ang aking signing sa Makati at press con. Sabi ko pupunta ko dito sa Calamba, Laguna kasi andito ang hAFFI Bootcamp partnership ng DTI at ng AFFI. And maganda po ang initiative nito with RD Malou and naumpisahan po nila President Jorge at ang team po ng AFFI at ng DTI family. Andito ang mga provincial directors at mga Assistant Regional Directors or OIC. Magandang umaga saka sa inyo pong lahat.
This is really a special program for all of you dahil ganito naman po nung nalagay tayo sa DTI at bago pa sa DTI – talagang ito na po ang adbokasiya ng aming grupo ho to really create smarter entrepreneurs sa ating bansa. And alam po ninyo, ‘yan ang priority rin ng ating Pangulo na gusto nya lahat maging prosperous, maginhawa, masagana ang bawat buhay ng Pilipino.
Parati nating naririnig ayoko ‘yung may nahihirapan, nagrereklamo, mahaba ang pila, pinahihirapan ng gobyerno. Kaya ‘yung Ease of Doing Business nakapasok na diyan. Maso-solve na ang mga problema sa iba ibang ahensya. Lahat po kami even sa DTI kung pwedeng i-online, naka-online na, automated, streamlined – we’re doing all this things. Pinirmahan ni Presidente ‘yung Ease of Doing Business. So many thing that he’s trying to do para talagang mapababa ang mga problema pagdating sa pagkuha ng permit sa government. Meron na tayong bagong Director General ng ARTA (Anti Red Tape Authority) and the like.
At more importantly, makikita naman po natin ‘yung magandang feedback from the people. Pero ang maganda naman nung ang Presidente for the past two surveys – record level 80 to 81% approval rating. Saan ka naman nakakita ng ganun? On the 3rd year tumataas ‘yung approval rating. And siguro pag makikita natin ‘yung survey na ‘yun di naman para purihin ‘yung gobyerno kundi ang importante din, natutuwa kami na nararamdaman pala nung tao na ‘yun – ‘yung mga pagbabago na pinangako nung bagong gobyerno.
And sa totoo lang po, alam nyo ikikwento ko na rin kasi parati nating kasama ang Presidente lalo na pag outbound missions–may Presidential visit sa iba’t ibang bansa siguro more than 10 baka more than 20 na. Kahit pa minsan minsan lang ang Presidente pero everywhere we go promise talaga ang nakikita po namin para siyang Dingdong Dantes dun. Oo mga artista talaga. ‘Yung crowd sana makasama kayo kahit minsan. ‘Yung crowd talaga humihiyaw – Duterte! Ewan ko kung naririnig nyo ‘yun or nakikita nyo online ‘yung chant parang kampanya eh di naman kampanya ‘yun. Parang it’s a gathering of Filipino community. So ganun nyo mararamdaman kung kaya natin lalo na rin pati OFWs na abroad kung tatanggapin siya ng ganun kainit.
Dati pag Filipino communities sapilitan para mapuno ‘yung hall. Ito talagang puno na, madami pang gustong pumasok – so pasensya na. Tapos ‘yung pagpasok na ‘yun, ang dami ng tao sumisigaw na ganun. Naramdaman mo ‘yung tuwa nila ang siguro parang sign ng pasasalamat. Kasi alam nyo ho sa maraming OFWs, Meron ho bang dating OFW dito? Uy ang dami naku eh di alam na alam nyo. Naabutan nyo po ba si Presidente sa visit o bagong uwi ba kayo o dati na? Ah dati na. So sa mga bago nakadalaw pa si Presidente sa inyo? O nakita nyo ‘yung kinukuwento ko noh–‘yung talagang nag “rah, rah, rah” sila kaya noh.
Kaya I think naramdaman po namin, kinikwento rin samin. ‘Yung Presidente daw natin ngayon talagang nabago nya ‘yung sistema lalo na, of course, the anti-illegal drug campaign. Tumahimik, nawala ‘yung mga istambay sa kanto, nawala ‘yung nakahubad, nag-iinuman, tumahimik ‘yung kalye. Para ‘yung safety daw talaga tumaas, gumanda. At ‘yung mga anak nila na everytime your abroad ang worry natin, ‘yung kamaganak natin back in the Philippines. Di mo alam kung makakauwi ng safe pag gabi. Nagaalala ka. Pero sa mga panahon ngayon, ‘yun daw ang malaking pasasalamat nila. Everytime kausap po naming sila sinasabi nila ang laki ng pagbabago kasi di na sila nagwoworry sa mga kamaganak nila. Tama ho ba? Ganun ‘yung kinikwento samin nung mga nakausap naming na OFWs.
So si Presidente natin, ganyan ka-sincere. Kaya nga mataas ang rating and isa po ito sa kanyang isa pang adbokasiya. Sabi niya, ayaw niyang lahat na may mga naghihirap. Gusto nya guminhawa ang buhay. So, some indicators naman po are showing us ‘yung unemployment rate bumaba. Dati nasa mga over 6%. Ngayon po ay 5.1%. Mga 3 months ago, 5.3%. Minomonitor namin. Ibig sabihin, konti ‘yung unemployed. Doon sa unemployment kaya po bumaba iyon, some part but not really a big part of it–maraming may trabaho. Pero a small part of it pero lumalaki is the self-employed.
So ‘yung self-employed, tayo tayo po ‘yun–‘yung mga negosyo na nagtayo, nagumpisa, di na ko naghahanap ng trabaho meron na kong negosyo–I’m self-employed. And we all start with that self-employed—di na naghahanap ng trabaho, I have my own business pero wala pa hong employee–‘yun ang umpisa.
And then later on, lalaki na ‘yung negosyo mo. I get one, two, three and then dumadami na ‘yung tauhan mo and that’s really the beginning of Micro Small. Moving from micro to small and the small to the medium which is really ‘yung advocacy namin. Dahil bakit po namin ginawa ang advocacy? Dahil ho ilang taon na? Dekada na ang Pilipinas dominated ng mga Micro SMEs, 99.6% naririnig nyo na ‘yan noh and it’s a backbone. Sinasabing backbone ng economy kasi about 65 or 70% ng employment dahil sa Micro SME. Pero ang contribution to the economy maliit. And you heard of this, 35 tumaas na ngayon recently 38%.
So ibig sabihin ‘yung 60% ‘yung balance 62% accounted for by the big companies ‘yun ‘yung .04% kasi 99.6 SME eh. ‘Yung balance account for imagine the bigger part 60 plus percent. So ibig sabihin nun, ‘yung Micro SMEs natin kailangan talaga ‘yung nagle-level up parati. Nagva-value adding. Para we become a bigger contributor in the economy. So that is the picture that we are looking at.
And it has really been our advocacy na kaya sinabi ko kanina, creating smarter entrepreneurs kasi po ang tubo andun sa being smart. ‘Yung tubo andun sa value adding. Kaya nga siya contribution to the economy. Ibig sabihin, it’s like your contribution to the national income. So ibig sabihin, gusto natin ‘yung income nyo malaki na, malaking contribution din siya to the total picture to the national income. Gets nyo?
Kaya ho to get that higher income contribution, kailangan tayo tayo rin pinapaganda natin ‘yung business models. Nile-level up natin. So for the same sipag at tiyaga for the same hirap mas malaki na ‘yung returns satin di ‘yung ng produkto dahil defective ah hindi – ‘yung returns. ‘Yung income malaki na ‘yung income natin for the same hirap and you are able to do that by innovating your product, innovating your processes. Ibig sabihin, pinapaganda, pinapagawang mas efficient o kaya ‘yung ini-innovate mo ‘yung business model.
So andito na tayo sa model, I think na discuss na ni RD kanina. We have 7Ms excluding RD Malou and Mon and Marissa and Mr. Dean. Naku pinilit ‘yung M—excluding that. Pero ‘yung 7Ms, talagang naguumpisa ‘yung Mindset. Kaya very important satin talaga ‘yung lumalaking negosyo, ‘yung creative mindset–entrepreneurial mindset. And then the Mastery. Knowing the ins and outs of the entrepreneurship tools. Kaya panay ho ang sharing naming ng branding, product dev, financial literacy, etc. So kasama na ‘yun sa ating module and the mentoring.
And I know in the AFFI, swerte po tayo/kayo kung part kayo ng AFFI. That continuing mentoring with all the mentors and continuing learning program ng AFFI, so very exciting. So it allows us, it gives us opportunity to continuously innovated level up and that’s rich solution to poverty alleviation. Leveling up our business at lumalaki at makaahon tayo ng isang tao. Dahil isang taong ma-hire mo, isang taong magkatrabho, isang tao will be out of poverty. ‘Yung pamilya nya will be out of poverty. Kaya nga ang laki ng role nyo kaya nga importante talaga sa role nyo ma-enhance parati ‘yung business model at dito na papasok ‘yung nabanggit ko na ‘yung 3Ms.
Si DTI may support pa ‘yan so ikikwento ko na din. ‘Yung Money which is the P3 kung kailangan niyo ng pondo meron ho kaming panlaban sa 5-6. Wala naman umuutang dito sa 5-6 noh? I suppose kayo na ‘yung medyo advance noh. Wala umutang ng 5-6? Sige. Kwento nyo na lang mamaya kung umutang kayo kasi baka ayaw yong magtaas ng kamay. Pero umutang kayo patayin na natin ‘yun di ‘yung nagpapautang–patayin na natin ‘yung 5-6. Kasi meron na kaming P3 ‘yung Pondo para sa Pagbabago at Pagasenso. Walang collateral, easy to get the financing, etc.. Parang umutang kayo sa microfinance institution–maiikli lang ‘yung form.
So Money, meron ding Machines. Kung grupo kayo, cooperative, may Shared Service Facility pwedeng ibigay ng DTI. Tapos pag may produkto na kayo may market na kaming ibibigay sa inyo pwede kayong magbenta na sa OTOP Hub, andyan sila Leon, sila Asec. Demphna–i-improve ‘yung product niyo at pwede na sa OTOP Hub para ‘yung pasalubong center dun na agad—ire-regular na parang trade fair. Kasi ayoko ng trade fair na three days lang, four days lang nawawala na.
Magke-create tayo ng market na parang incubator para everyday nandun–kaya tayo may Pasalubong Center branded now as OTOP.PH/OTOP Philippines Hub. Kapag nag-level up ka ‘yung produkto napaganda pa gusto pa namin mainstream ulit nasa mall diba? Saan ba pumupunta ang mga tao? ‘Di ba sa mall. So kumuha tayo ng mga pwesto sa mall kung saan kayo makakadisplay ng product niyo for free. Walang bayad, walang renta na PHP25,000 to PHP30,000 a month or kapag grocery products, magli-listing fee.
So may nakapasok sa grocery dito ng produkto nyo? ‘Di ba mahal ng listing fee? ‘Yung totoong listing fee PHP3 million yata ngayon dati PHP1 million ‘yan noong panahon naming per product–so mahal. Dito sa Go Lokal! libre pero kailangan ma-curate ‘yung produkto. Ibig sabihin, mapili, maganda at pwedeng idisplay na parang proudly Philippine-made. So these are efforts para maging mainstream ‘yung mga produkto natin.
Now, there is the last M which is the Model. And in the Model, our vision there is all the Negosyo Centers and we have 1,070 Negosyo Centers at sa konting pagyayabang, over two million na nag pumunta sa Negosyo Center nationwide. We’re proud to say that na natulungan ng Negosyo Centers. Diyan sa Negosyo Centers maraming pwedeng itulong sa inyo pati ano ang pag-register ng business.
Ituturo kung sa pwedeng manghiram, may business councilors, etc. So doon, ino-offer din ang model na pwede nyong pasukan. Actually di kayo, ‘yung mga iba pang negosyo or walang maisip na negosyo. Pupunta sila para ano pa bang business model yan. Kaya nga andyan kapartner ‘yung mga franchising or kaya minsan may livelihood kami na pwedeng ioffer ‘yun sa talagang very basic. But the other part of franchising rather than you getting the franchising–is your business ang ipa-franchise and that’s the bigger story. And this is what we refer to as innovating your business model.
So from your business model, you are selling, you have a kiosk, you have a store, now the actual business model when you make money is through franchising – it’s no longer just selling the product. This is the reason why dinadayo po naming ito pati ako dumayo dito para pakita na this is a very good program. Franchising is the key to really elevating your business model, upgrading ‘yung business model.
Ang dami naming istorya na ganyan. And of course, our partner sila Dean Pax, Sila Jorge, AFFI and lahat po ng kasama namin, ang kwento po nila dumami talaga, lumaki ‘yung negosyo nila nung nag franchising sila. And I’m really thankful sa HAFFI because they are sharing this knowledge. Palakpakan natin ang AFFI for really sharing this knowledge. Di nila inaangkin, kami lang, amin lang to kasi sa totoo lang marami na silang ginawang pera. Dahil sa dami ng branches nung franchise na kumuha under them. But they all sharing this secret to you and the system para kayong lahat nagkwento na kayo ng mga inspiring story siguro. Walang wala na, pero nag umpisa ng system na isang negosyo muna establish ‘yung track record tapos pafranchise. Biglang ang dami ng naging prosperous.
In other words, milyon milyon na ‘yung kanyang naipon dahil sa dami ng kanyang successful franchise system. And that is what we would like you to have. And that’s the reason why we are here and we are all working towards. ‘Yung sa inyo pong fulfillment ng inyong mga pangarap.
And again, babalikan ko ‘yung sinabi ni Presidente Duterte.lahat po ito ginagawa ho ng gobyerno, in partnership with the likes of AFFI, para ho talaga maiangat ‘yung buhay ng bawat Pilipino. It sounds na parang paulit ulit but that’s really the main story. Lahat po ito ay para sa tao, para po sa inyo, para po sa ating mga kababayan. Kaya more power to all of you and makinig ho tayo at matuto.
Keynote Speech of Secretary Ramon M. Lopez, KOIMA Philippines-Korea Business Forum
KEYNOTE SPEECH OF SECRETARY RAMON M. LOPEZ
KOIMA PHILIPPINES-KOREA BUSINESS FORUM
AND NETWORKING LUNCH
11 July 2019, Conrad Hotel, Pasay City
Ladies and gentlemen, good morning! Annyeong haseyo!
First, I’d like to thank the Korea Importers Association (KOIMA) for inviting me to speak before you today. And I would like to welcome the Korean delegates of KOIMA to the Philippines as you conduct your buying mission.
Again, as we met last month in Korea, we extended the invitation and we are making sure that your visit would be very fruitful as well as giving you time to look at the other products and other places in the Philippines that hopefully you can find time to also appreciate the culture that we have here in the country.
On a personal note, I would like to thank Chairman Kwang-hee Hong and his team for organizing this mission. This effort was originally set up as part of the celebration of the 70th anniversary of diplomatic relations between the Philippines and Korea this year.
In fact, we are all working on many projects that we hopefully culminate when the President sets in visit to Korea sometime in November this year. When we visited Seoul last month, I discussed this mission with Chairman Hong and the activities agreed upon by KOIMA and the Philippine Trade and Investment Center (PTIC) in Seoul headed by Councilor Jojie Dinsay. During our talk, Chairman Hong requested the support of the Department of Trade and Industry (DTI) to help them achieve their goal of giving Philippine products access to the Korean market.
I wish to assure you that—as we had committed in that meeting—DTI and our partners promise to make your visit here a success especially as far as business matching is concerned. Moreover, we hope to make your trip memorable as well.
PH-KR Trade Relations
As the Ambassador noted earlier, the Philippines and Korea share a long history, recently marking its 70th year anniversary of diplomatic relations. Trade and investments between our two nations have also been booming.
As of 2018, Korea is the Philippines’ 4th largest trading partner, our 8th top export market, and our 2nd top source of imports. We have recognizes well that there is a trade imbalance and that’s the reason why we fully appreciate the efforts being extended by the Korean government. And now, by the KOIMA Group that will look at all other products that they could purchase for the Philippines in the hope of also narrowing the gap of trade imbalance that we have in Korea.
In fact, as we thought of the trade imbalance it is one of the reasons why we initiated the elevation of our trading relationship from what we have right now which is basically an ASEAN—Philippines being part of ASEAN – ASEAN-Korea FTA. And we want to have our own bilateral FTA between Philippines and Korea.
As many of you would know, it started also with our desire to have our key export commodities. In particular, bananas – which are with huge potential in gaining more market access in Korea and making better, I guess the tariff rates that can be offer to our critical export items like bananas, pineapples and other products including industrial products.
So when we we’re discussing that with the Foreign Trade Minister of Korea and we’ve looked at several mechanisms by which we can take this up and then later we decided that having a bilateral FTA would be the best way to discuss all these and have a renegotiation of all the products that can hopefully have a better market access to Korea in an effort to also narrow the trade imbalance between the two countries.
Of course, it would have to be a win-win negotiation and the two negotiating parties have started the talks when we open it up last month. And intention is to have win-win agreement and hopefully giving more preference to products that can hopefully enter the greater way to the Korean market.
PH Exports & Investments
With this in mind, KOIMA’s buying mission is quite auspicious. Presently, the Philippines is the biggest supplier of bananas and pineapples in Korea. I am also aware that products like fresh mango, calamansi which is the Philippine lime, coconut water, virgin coconut oil, and banana chips are very popular with Koreans. However, I would like to encourage you while you’re here to discover the other products from the Philippines that you can bring back home.
For example, the Philippines is promoting food products for export to Korea like canned tuna, chicken, bananas, and dried fruits. We are also pushing for organic and natural products like food and health care products, as well as design-driven products like furnitures as well as garments and chemicals as well. For your consideration as well are electronic parts and components, and software and game development, among others.
I took note of the interests of the KOIMA companies here and I am glad to see that you represent a wide range of products. I am confident that during your business matching later this afternoon, you will meet the right companies from the Philippines as arranged by our DTI team. With your support, we hope to bolster our exports, which would generate more jobs and employment for our people. It would also help address the trade imbalance between our two countries.
Furthermore, we urge you to study the possibility of expanding your production facilities here in the Philippines. This would not only sustain Philippine exports to your country while integrating them into your value chains, it would also allow you to capture the Philippine market of more than 100 million. And considering our trade links to ASEAN, this would give you additional access to the ASEAN market of more than 650 million.
Among priority sectors that you can invest in are food production and processing, agribusiness, and manufacturing. Other sectors that may interest you would be those sectors involved in the BUILD BUILD BUILD -- the finance and banking, infrastructure, tourism industry and real estate, among others.
FTA for Greater Trade
Your visit today is most opportune, given that the Philippines and Korea have begun negotiations of the FTA last month as I have mentioned. These negotiations herald the new chapter in the relationship of our two nations, borne on the back of our mutual interest for such an agreement.
In the Philippines, the FTA means we can achieve enhanced market access for our products and services. We also hope to find complementation in resources and industries that would create equitable balance of trade. For example, this FTA may enhance market access for our agricultural products into the Korean market. It could also help us establish an e-vehicle industry because the Philippines can support potential investments for example in the battery industry with its nickel and copper resources.
We have talked also in the e-vehicle industry last month in our visit. And we are now working on a program that can hopefully develop a manufacturing resurgence program for the e-vehicle, because we said that if we want to be big and to be a front runner in this industry, our government will have to give extra support – support beyond the usual fiscal and non-fiscal incentives. So our group is right now working on such program.
We are hopeful that our respective teams can complete the negotiation by November of this year. Technically, they have to be finish sometime September – in terms of negotiation, of the basic terms so that it can be ready for signature by November. I’m confident that KOIMA and Philippine exporters will benefit from this agreement once it’s concluded.
Start of JCTEC Talks
Last month, we also had our first meeting of the Philippine-Korea Joint Commission on Trade and Economic Cooperation (JCTEC). These activities signal the importance we accord to your nation as a major trade and investment partner.
During that meeting, Areas of Cooperation that could be implemented between the Philippines and Korea were presented and discussed. We also conferred on how we could best strengthen economic relations between our two countries.
The JCTEC is equally important as the FTA as it tackles the broader perspective of economic cooperation. Through this venue, we can push for greater trade cooperation and economic cooperation that can help KOIMA and Philippine exporters.
I was just also told by our Undersecretary that Korea has the FTA Academy. And of course this is one possible area of cooperation to cooperate on establishing an FTA Academy also in the Philippines.
Take Part in PH Growth Story
So we always say this, that it’s a good time always to take part in the growth story of the Philippines. The Philippines really continue to enjoy rapid growth average over 6% in the past 15 quarters and a very stable positive grow in the past over 80 quarters. And that shows that the Philippines is really well on his way to the upward growth trajectory.
More importantly, the sectors bumping this up would be manufacturing, construction, and all other industry as well as services. So it’s no longer dependent just on services but really even on the industry sector.
On the expenditure side, we see also the resurgence of the investment, capital formation side as well as the government expenditure in support of the BUILD BUILD BUILD so you would see double digit growth of this sectors that we look at the GDP feature.
More importantly, beyond this income GDP numbers would be how translates the people and we see the huge impact on the people. First, we’ve seen the poverty incidence from 27% to 21%. And Duterte administration is really looking at ending his term with 14% poverty incidence.
Also confirming those numbers would be the recent survey on self-rated poverty and the 38% is the lowest in its history. And that means that the people considered themselves less poor. And as we provide more job opportunities and income opportunities and business opportunities that certainly there’s nowhere to go to bring down this poverty incidence numbers.
Unemployment rate has also gone down to 5.1% that used to be over 6%. Underemployment has also gone down to 13% that had used to be over 19%. So these are very good indicators that really, the growth is leading to more jobs and more economic opportunities for the people.
And you know, one job that you create for a person it’s really actually helping that person and the family be lifted out of poverty. And this is really the essence of what President Duterte has been really pushing all of us to work on. Create all these opportunities for our people. All works come to how it impact to people and this is certainly the passion of everyone in the government to create all this income job opportunities so that everyone can be uplifted when it comes to their status in life.
In conclusion, expanding trade between our two nations will undoubtedly benefit everyone. We fully support your mission as this means more jobs and employment for our people, which would generate greater inclusive growth and shared prosperity. But we will also do our part to create a more conducive business environment in the Philippines. And our President has continuously assured all investors – protection on your investment and making sure that there would be Ease of Doing Business.
Our Anti Red Tape Authority has been working well and there’s a new Director General. So many complaints have been filed on them and were addressed. The people can feel that all these concerns on the Red Tape are now slowly getting to be addressed. And we are also working on aside from the continuously streamlining the processes, we hope to automate and really have an e-government capabilities in government so that we can really facilitate the Ease of Doing Business.
And all this is again is consistent with how the President would like the Filipinos to experience their life here. We don’t want to hear any complaints; we want to address their concerns whether you’re ordinary Filipino making life easy for you. No hassles. No long lines. But at the same time, if you’re also in business that there will be Ease of Doing Business. And definitely President assure all the investors that if there is a problem – there is a group, an office, a person, a government personnel making life difficult for you, just complain and he will allocate time to talk to you so that we can address the problem immediately. So with that, I wish you well and a great session today and tomorrow.
Magandang umaga po! Kamsahamnida.
Speech of Secretary Ramon M. Lopez, OTOP Philippines Hub Blessing and Buyers' Day
SPEECH OF SECRETARY RAMON LOPEZ
OTOP HUB BLESSING AND BUYER’S DAY
JULY 4, 2019, DTI MAIN BUILDING
Good morning. It’s great to be here, another milestone in the history of DTI, as well as OTOP, including the Go Lokal! na rin. Definitely, congratulations to the team. Sina Usec. Zeny, the team of the Asecs, led by Asec. Demphna for the OTOP, Asec. Bles, is Asec. Ameenah here? And all the RDs, Regional Operations Group, BSMED, BDTP, lahat po ng tumutulong dito para ma-relaunch po natin ang OTOP.
OTOP is a very good program, especially now that we have the OTOP Hub. As you know, we are all doing this not for us, pero para sa mga kababayan natin na nandoon sa micro and small segment ng ating entrepreneurship community.
Ang atin pong pangulo, ang kanyang puso ay nasa maliliit na tao. Ang kanyang sinabi, ay huwag na ‘yung malalaki, kaya na nila yung sarili nila. But really, OTOP is about empowering those at the bottom of the pyramid at the entrepreneurship triangle. Ito po ‘yung mga micro and small, ‘yung mga startups.
Kita naman po natin ‘yung nagagawang empowerment sa ating mamamayan. Karamihan dito nagmula sa maliit, nandito ‘yung mga inspiring stories natin. Even si Clarke na hindi naman kaliitan ang negosyo, pwesto lumaki noong na-mentor. At ngayon at mentor na siya. Magandang mga examples ‘yan. Marami sa atin ay nagsimula sa wala, nagsimula sa maliit, pero lumaki.
Empowerment brings enhancement of the business model, and enhancement of the product. Hindi naman bibilhin ang produkto dahil MSME ka, bibilhin ‘yan dahil enhanced product ‘yan. Bibilhin at bibilhin.
We have thousands of stories to tell. Alam nila ‘to, ‘yung team nina Demphna, nina Leon, going around the country, and the team in the regions, talagang direct tumutulong sa MSMEs. Kaya pinapa-highlight natin ‘yung before and after, talagang ang laki ng pagbabago. Kaya nga noong gumanda na, ang benta nila nag-double, triple, quadruple, and many more.
‘Yung dating OTOP, ang report sa akin, less than a million pesos ang benta, ngayon halos, PHP 2 million na. Lumalaki talaga. Lumalaki sila. Ang sipag at tiyaga, maganda ‘yan eh. Pero kapag naturuan mo pa ng creativeness at being smart entrepreneurs, sabi ng natin, ‘yung sipag at tiyaga nagiging two times, three times eh. Dahil mas maganda na ‘yung sistema, produkto at processes. Ngayon, ‘yung pagod mo, mas malaki ang balik sa’yo. Talagang ito ‘yung prosperity na nadadala sa ating mga kababayan.
Napakalaking bagay na nakikita niyo talaga—in fact meron tayong report dito—kung papaano natutulungan ang ibang businesses. Nandito po ba si Mark and Veronica Reyes? Owners po sila ng Nolan Lucas. Batang bata. OTOP beneficiary sila noong 2018. Natulungan sila sa packaging, label. At ngayon naka-attract na sila ng institutional buyers. Naging regular supplier na sila. Ang sales nag-increase ng 130% in 2018 compared to 2017 dahil sa trade fairs at pag-improve ng produkto at pagsali sa trade fair. Palakpakan po natin.
Si Ellynes Tuna Chicharon at Ellynes Pasalubong Products, nandito ba? Nasa loob. Nasama rin sila si, Ms. Felisidad Into. Na-improve din ang kanilang produkto sa packaging, label. At ang quantity ng kanilang benta ay nag-double kahit nag-increase ang presyo.
Iyan naman ang maganda sa magandang packaging. Mas malaki mo nape-presyo nang hindi umaangal ang buyer. Value for money tayo lagi. With that higher pricing, ang tubo lumalaki. For the same pagod, mas malaki ang kita. Prosperity ang kapalit.
Ito po ay gustong gustong program ng ating Pangulo. We want to make more Filipinos prosperous. Isa pa po si Baker’s Field Biscocho de Zamboanga ni Ms. Ester Perez. Tapos ang maganda pa ho nito, kapag napaganda ang produkto, mainstay na siya sa mga OTOP Pasalubong Centers. That is also another initiative or innovation that we did at DTI, ‘yung mga produkto, hindi lang sa trade fair lilitaw. Lulubog, lilitaw. Kapag trade fair lang nabebenta, kapag wala, hindi na makita. So ngayon, with digital technology and mainstream, every day present na ang produkto. With OTOP Hub, available na siya, every day.
Madami na tayong OTOP Hubs at laging bukas ‘yun. Magkakaroon ng libreng exposure ang produkto nila. Hindi kami naniningil. Kung sa mall pa ‘yan, may bayad pa yan. At meron pang isa, Go Lokal! Marami na tayong ginawa to mainstream the MSME market. That’s really a huge improvement, better the sales of our MSMEs leading them to prosperity. Lahat ito ginagawa natin para sa tao, para sa ating mga kababayan.
Magandang umaga sa inyong lahat and again congratulations.
Keynote Speech of Secretary Ramon M. Lopez, Youth Entrepreneurship Program Mindanao Roadshow
KEYNOTE SPEECH OF SECRETARY RAMON LOPEZ
Youth Entrepreneurship Program (YEP) Mindanao Roadshow
27 June 2019
Ladies and gentlemen, again maayong buntag at magandang umaga po sa inyong lahat!
Alam nyo po everytime po na magkakaron ng mga Youth Entrepreneurship Summit and especially this program. It gives an inspiration. I was a part of Go Negosyo before. Natalaga po tayo ng ating mahal na Pangulong Duterte dito po sa Department of Trade and Industry. And I believe that it is the President who has the heart to really touch the lives of especially those in the marginalized community at lalo na po ang mga kabataan – ang kinabukasan ng ating bayan. Ang sabi po niya,kaya po ako ang naisip nya para sa DTI – talagang para madala sa buong bansa natin yung ginangawa po naming noon
at pagdating sa pagtuturo ng entrepreneurship – pagbibigay ng mga free seminars, mentoring. ‘Yun po ay tinutuloy natin ngayon.
Napakadami pong programa ngayon, of course with the help of Department of Trade and Industry. Mga kawani, the network, employees from the Department of Trade and Industry and other partner, agencies even the private sector will continue to bring seminars and mentoring and coaching in all the Negosyo Centers. We have 1,070 nakakalat yan sa buong bansa na mga Negosyo Centers kung saan we also try to put coaching tables. Ibig sabihin, pag pumunta kayo doon there can be coaches – negosyo mentors who can really address your quest for more knowledge about entrepreneurship.
So sa amin po dito, amin pong dinadala ngayon ang YEP (Youth Entrepreneurship Program) dito sa Mindanao, it’s part of the roadshow that we doing nationwide. The youth is really an important sector in the economy. As mentioned earlier, we crossed for more than ½ or the average for the Philippines and we are always cited for having a very demographic sweet spot. Average age of 24 years old. You know what does it tells us, ibig sabihin we’re 108 million Filipinos now. First, we are a huge consumer based. Then, sa babanggitin nyang young age. Aside from being young, we are now reaching unemployment rate about 5.1. This is one of the lowest in the history. We used to be registering over 6.6% in unemployment. With low unemployment, ibig sabihin maraming may trabaho eh bata yung society, ilang taon pa ibig sabihin lalaki ‘yung ekonomiya natin, ilang taon pa lalaki ang ating consumer based so that’s one side of the future. And that’s the reason why that there was projection -- by 2050 we’ll be the 6th largest economy in the world.
The other side of it is that with that large population, it turns out also a huge pull on manpower resources. Ibig sabihin, maraming pumupuntang investors dito because they know that there is a huge supply of manpower. We have a labor surplus and everytime they come over they know that like every year we have 700,000 graduates over 10% of the 75,000 are into Science and Technology courses and you add even the vocational and technical courses. It’s really a rich source of even mga innovative entrepreneurial ventures. If not, a source for technical people that can help them in their organization.
Going back to that 5.1% unemployment rate. I must tell you that part of that also was the product of brought about by the increase in self-employed. Ibig sabihin, ‘yung self-employed di na naghahanap ng trabaho yan meron na silang negosyo and that’s the reason why ang ating adbokasiya sa pagnenegosyo ay makakatulong pa rin sa pagbaba ng unemployment rate dito sa ating bansa.
We believe that for every person that gets employed or starts a business ‘yun na po ang pinagmumulan ng pag-ahon mula sa kahirapan. We lift 1 person out of poverty at ‘yung pamilya nya. Kaya nga importante po that’s why mandate of the Department of Trade and Industry is trabaho – mabigyan ng trabaho. We invite all investors to invest in the country both local and foregin investor. Mabigyan ng negosyo. Ito pong ginagawa natin, mapalaganap ang negosyo at konsyumer. Trabaho, negosyo at konsyumer. Consumer protection in terms of standards, in terms of prices. So iyon po ang naging mandato ng Department of Trade and Industry at tuloy tuloy po naming itinutulak ang mga adhikain naming para po sa ikauunlad ng ating bayan.
Now, I would say that nowadays is the good time to invest and start a business in our country. Nabanggit ko po ‘yung low unemployment rate, huge population, demographic sweet spot. Our economy has been growing for the past 85 quarters. Alam nyo po ‘yung quarter. Three months ‘yan times three, 85 quarter, positive growth. Nawala na ‘yung up and down moment past cycle that we were experiencing noon kami ay bata pa at noon kayo ay wala pa. In the 80’s, the 70’s ang atin pong economic growth ay up and down.
Now, since that 85 quarters positive growth and in the last 15 quarters ay nasa average above 6%. In fact, karamihan more than 6% except for the last quarter because of the delay budget so pero babawi tayo sa mga succeeding part ng quarters so that we can also reach again the 6% growth. So ibig sabihin, we are the envy of many countries everytime we meet other countries, tayo po second fastest growing economy. Imaginin ninyo in the region – next to Vietnam especially to the Southeast Asian. So maraming gusto, so pano nyo naachieve yan 6% sila po nasa mga 1, 2 maybe mataas na ‘yung 3% and tayo consistently as mentioned over 6%. Ito pa mas maganda, if you look at Davao – Davao itself. Gross regional domestic product growth rate. ‘Yung 6% national ‘yung growth rate. Davao, 8.6% - the second fastest among 17 regions. So ‘yung mga taga Davao dito palakpakan natin ‘yung malakas na growth rate. At ‘yung unemployment naman nabanggit ko 5.1 nationwide. Sa Davao 3.1%, ibig sabihin, 3rd lowest among regions. So ibig sabihin 3rd lowest huwag kayong malungkot ah. Ibig sabihin, maganda ang employment rate. So it’s indicative that there are many job opportunities here in Davao, sa underemployment, ito ‘yung quality of jobs. ‘Yung bang may trabaho ka na pero naghahanap ka pa ng trabaho – underemployment ‘yun. Pero kung satisfied – masaya ka na sa trabaho mo then ibig sabihin gainfully employed ka. So minimeasure din ‘yung underemployment ‘yung di masaya sa trabaho which like the quality of jobs. ‘Yung dating numero natin dyan nasa 19% and then we went down to 16%. Ang huli po natin ay 13.5% ng underemployment -- nationwide.
Again, in Davao it’s 8.2% so masasaya ang mga nagtatrabaho dito sa Davao. Maganda rin at mababa ang unemployment rate so napakaimportante so ibig sabihin maganda ang panahon ngayon.
In China in the last 30-40 years, they consistently grew rapidly more that 7% and that’s the reason why from a country field with poverty, people with below poverty level. Right now, their poverty level is below 5% napakababa na dahil sunod sunod ‘yung growth. And in our case basically what we’re trying to reach is the lower a poverty level which will continued growth rate of over 6%.
Nung pumasok po ang Duterte Administration, nasa mga 25 or 26% ang poverty level. In the first half ang latest record po it’s down to 21% so marami na pong nakakaahon mula sa kahirapan and we intend to end by 2022 sa level ng mga 14%. And hopefully with such a rapid growth with all these major reforms, BUILD BUILD BUILD, infrastructure development, program in our drive to increase ang investments, create more free trades agreements with other countries, palakasin pa ang trade, ang investments. Manufacturing now growing from 5 to 7% na dati noon 2% growth. Ibig sabihin, masyadong malakas at mabilis ang ekonomiya. Ibig sabihin din nito na napakaganda ‘yung opportunities sa inyo/ating lahat lalo na sa larangan ng pagnenegosyo.
In China, as I was mentioning kaya ko nabanggit ang high growth rate in China, para bang kahit anong negosyong pinasok at inumpisahan noon lumalaki ang China. Ang dami ng yumaman sa China because of that kasi they were growing with the economy. ‘Yun din po ang invitation naming sa lahat ng mga nagnenegosyo lalo na po kayong mga kabataan na naguumpisa ngayon. There’s nowhere to go but up at you ride with the growth of the Philippine economy.
I’m sure when we see each other again maybe in 10 years or 20 years kayo na ‘yung mga speakers dito, kayo na ‘yung maglelecture samin at kami ay naka-wheel chair na.
And there are lot of amazing, inspiration of stories, we just read up on many books about those young entrepreneurs who made it big. Sila Tony Tan Caktiong noong araw, started Jollibee. Even our good friend Injap Sia who started Mang Inasal. He’s now into real estate they earn a lot. The potato corner story na dati ay isang branch ng kiosk. Now, they are getting to be 1,000 -- worldwide pa. Their valuation is now several billions in pesos.
But I must say that for many young entrepreneurs of today as mentioned po ni Ms. Baby earlier, the digital age is really a great opportunity for many of you. And totoo po ‘yun and if you are in business you always try to differentiate. Pag pasok ko dito, how can I differentiate? How can I sell more let’s say what I offer whether it’s a product, it’s a technology, it’s an app, it’s a platform. How can I be different from the other out there.
The advantage of the young is really as mentioned, you are all tech savvy. You are what you call digital natives kami kasi digital migrants – natuto na lang kami. Kayo pinanganak ng may computer at cellphone sa tabi. Sa crib nyo pa lang meron ng mga digital games. So you are native and that is your advantage. You can do so much with technology nowadays. There are lot a business models that you know better that I do when it comes to the new digital business models – the apps, the platform that you have around us, the AirBNB, the GRAB, and the UBER and so many platforms kung saan pinagtatagpo ang buyers at ang sellers and those have been very good platform. Of course, the Facebook and the Google. The future like an AI. There’s a lot of opportunities there and DTI is also an agency that’s now trying to create the AI phenomenon in the country. We believe that when the Philippines continue to enjoy the phenomenon of the OFW in the 70’s and 80’s and until now we have about 12 million Filipinos around the world bringing as anywhere between 25 billion to 28 billion dollars every year. Tingnan nyo ‘yung sumunod in the 2,000, in the 90’s sumunod naman BPO phenomenon at maraming nasama sa ating mga kabataan nasa Business Process Outsourcing and Business Process Management and I.T. They are also contributing about 28 billion dollars and they are about maybe 1.5 million. So kumpara ninyo ‘yung 25 OFW divided by 12 million ‘yung BPO about to 25 to 28 divided by 1 million na lang. So mataas na ‘yung per capita – the contribution per head di ba.
And now, we move forward and look at AI so it’s another industry that we can all be participating. I mean Philippines can be the center for excellence. So you may be wondering why? Masyado advance yata ‘yun. No. We’ve been talking to the many groups in the AI industry and their saying that the Philippines has a good chance of being a center for excellence in AI. One, as mentioned kanina we turned out over 75,000 graduates in the Science and Technology. Pwede rin ‘yung di nakagraduate voc tech pwede rin pumasok sa AI because if you look at the AI -- the value chain. There are parts of the chain that did not need a high tech programmers on the Science and Technology and Mathematics background. They can be the other functional competency. They are part of that AI value chain as well. And the Philippines has that manpower resources. If you look at the phenomenon – OFW, BPO, AI. They are back up by people diba – manpower resources.
So that’s the reason and in the AI our advantages is with that huge resources that we have with additional training even TESDA can be part of this. The AI companies that are Filipino owned and that are willing to help us our state universities and colleges nationwide that are preparing for that and that we will use as part of the eco system. Government agencies like DOST, NEDA, DTI and all the partners will all gather around and really try to create a very robust AI manpower for the Philippines so that AI can become the center for excellence for the Philippines.
Our projection we can easily hit even more than 25 billion ang projection nila 100 billion dollars also for the PH and even part of that and if your part of the sabihin na natin na 100 thousand or 500 thousand it’s still lower than the 1.5 biliion in the BPO. So ibig sabihin, your per capita contribution per head will even be larger. Kayo ‘yung mga future millionaires and billionaires in the AI field. So look into those youth, that is the advantage over the old guys – the technology.
Isa pa, in the technology, aside from source of innovation po ‘yan. You’re introducing programs or projects, business models that are not the usual. So ibig sabihin, may differentiator kaagad kayo than the brick and mortar business. You can start with a business with little capital because if you are in the technology ‘yan ang pwede ninyong maumpisahan at maraming support groups -- the incubators, the accelerators who can help you in your various business models.
If you find it out in the brick and mortar, what do you need? Big capital. Put up a plan, manufacturing, apparel, clothing, textile, chemicals anything you will need a big capital. In the technology you just need one big idea. A bright idea, a technology platform, an app and you can have a big chance to succeed. You’ll earn billions and billions kaya we will encourage you to look into new business models that can really differentiate you and really the future is digital. Even brick and mortar companies are doing their own digital transformation. So ibig sabihin ‘yung mga ginagawa nila pang araw-araw – monitoring, sales, selling, getting research, R and D. Lahat ‘yun are being digitalized. They’re using e-commerce, they’re using the internet etc. They’re using ERP systems and these are all digital. This is where you really can come in. The digital transformation will lead a lot of you.
And therefore, I would like just to go to the last topic, which is really in support of all this. The DTI -- basically provides the environment that will really harness, ‘yung mga kakayahan po ng ating mga kabataan at all the Filipinos in general in terms of knowing all the tools, the technical tools or the functional competencies, ibig sabihin din nun how to do that business – from the product development to design, packaging to selling, financial literacy and all that. Those can be learned.
That’s what we’ve been calling as part of the 7Ms. So changing mindset as expressed as all speakers earlier, the Mindset to win, to succeed, to look at the positive, the opportunities – that’s the mindset of an entrepreneur. Number one, di tayo aabante talaga pag wala ‘yung number one na M na ‘yun. And of course, the Mastery, which is the know how, I’ve been telling you about. So it’s an inspiration in know how sa mastery. Then of course, you have to have continuing mentoring so that’s the third M. In all these – mindset, mastery and mentoring, these are now what we’ve been doing. The summit like this, the fora, the Negosyo Center’s coaching, mentoring and many free seminars we do around the country.
We also have other interventions for the brick and mortar businesses, we do the machines. To the new technology we have also the FabLab, mga laboratories for new equipment, 3D printing and where you do the prototypes and other digital assistance. So we do have those shared service facilities.
And then we do also give micro financing. So we have now the Pondo para sa Pagbabago at Pagasenso. So if you are an existing entrepreneur and you would need working capital or funding or requirement for your working capital, then you can approach the DTI. We have the Small Business Corporation, you can also get some funds there. Ito yung panlaban namin sa 5-6. Ito po ‘yung programa namin ni Presidente para ho talagang magkaroon ng kapalit ang 5-6. So you can get microfinancing, no collateral needed and we just have to have that good business idea, a good running business and you can have this funding. From anywhere po from P5,000 to about P200,000.
You have that – may produkto ka saan mo ngayon bebenta? So we have also interventions on the other end, which is market access. So we made a program that’s tied up with different malls. If you want your products to be showcased and given exposure for free. You can be featured in our, first, OTOP Hub or the Go Lokal in the malls. The OTOP Hub you know the One Town One Product hub, there’s a marketplace for this Micro SME product. Parang dun sa pasalubong centers na makikita sa airport. They are now being rebranded as OTOP Hub. And then if your products continue to be upgraded pwede na sa mall ayan icacarry na din natin sa Go Lokal stores. So, meron ho mga ganung assistance on the market itself. So para talagang 360 degrees assistance to the SME’s.
Then of course if you go to the Negosyo Center you can also be informed on the other model the 7M’s – other models of business that can really help you in your entrepreneurship journey.
And just for your information, In Davao alone, if we have 1,070 Negosyo Centers, In Davao alone may 50 Negosyo Centers. And a lot of services we provided there the services that I’ve mentioned. The shared service facilities, you have about 183 out of the 2,000 nationwide and thousands and thousands of beneficiaries being assisted by all these services.
So again let me end by reminding everyone that swerte po ang ating mga kabataan ngayon. You have a lot of opportunities especially in having new business models, in differentiating business models looking into the digital transformation age. A lot of opportunities where you can really succeed and take grasp more firmly your future and enter into your own entrepreneurship journey.
Sana po magkaroon ng realization. Ang gusto po ng ating Pangulo na kung saan lahat ng Pilipino ay magkakaroon ng masagana -- a prosperous life for all Filipinos.
This is really your opportunity to create a better life for yourself. For the country, we want to generate new jobs, new businesses where everyone can be employed.
And again let me just remind you that our economy is full steam ahead, all engines are firing and it’s time for you to ride on the growth of the Philippines.
Maraming salamat po. Good morning everyone!
Opening Speech of Secretary Ramon M. Lopez, 8th Philippine – France Joint Economic Commission Meeting
Secretary Ramon M. Lopez
8th Philippine – France Joint Economic Commission Meeting
Makati Diamond Residences
Secretary of State to the Minister for Europe and Foreign Affairs Jean Baptiste Lemoyne
French Ambassador to the Philippines Nicolas Galey
DTI Undersecretary Ceferino Rodolfo
Deputy Director of Bilateral Affairs for the French Treasury Christophe Bories
Distinguished officials from the Philippine and French governments
Friends from the Philippine business sector led by Philippine-France Business Council Head Mr. Anton Huang
The French MEDEF Business delegation led by Mr. Francois Corbin
Friends. Ladies and gentlemen.
Bonjour! Good morning! Mabuhay!
I am proud to welcome you all this morning to our country – the Philippines - on the occasion of the 8th Philippines-France Joint Economic Commission (JEC) Meeting. This high-level economic dialogue platform will enable both our countries to discuss areas for trade, investment, business cooperation, and other related matters. This, in turn, will advance bilateral economic ties of both nations, which complements the Philippines’ engagement with EU as a bloc.
I have to give a special thank you to Ambassador Lazaro and her representative here for her steadfastness in working with our Ministry, the Department of Trade and Industry (DTI), and the French side in having this JEC in Manila convened. The previous JEC meeting occurred four years ago in Paris, October 2015.
The Philippines-France JEC is the longest running between the Philippines with a European country, and I am especially happy to host you all in Manila. This comes at a time when bilateral trade and investment between our countries have been growing significantly.
In 2018, total trade between the Philippines and France grew to USD2.71 billion, up by 56.65% from its 2017 level at USD1.73 billion.
Contributing to this record number is the dynamic growth posted by trade both ways in 2018.
Philippine exports to France in particular was up by 43.89%, from USD807.63 million in 2017 to USD1.16 billion in 2018. Top items include vessels of transport, electronic products, and parts of airplanes. Philippine exports to France represents about 10% of total products sent to the EU.
French exports to the Philippines, on the other hand, was up by 67.13%, from USD924.81 million in 2017 to USD1.523 billion in 2018. The Philippines purchased airplanes and its parts from France in 2018.
The total trade figure placed France as the 14th largest country trading partner of the Philippines, behind other EU countries such as Germany and the Netherlands. France was also the country’s 17th largest source of products, and the Philippines’ 12th largest export destination.
Approved investments from France to the Philippines for 2018 as reported by our investment promotion agencies was up to Php 2.56 billion, up 2,478.8% a low base, of course. This placed France as the 11th largest source of approved foreign investments for the Philippines in 2018, just behind EU countries such as the Netherlands and the UK.
Today’s JEC meeting will led by our Deputy Minister, Undersecretary Rodolfo and Deputy Director Bories with key government representatives from both sides. You will hear about some of the ongoing engagements between our countries. Specifically, these include the Maritime Industry and Shipbuilding; Infrastructure and Transportation; Green Technology; Digital Economy and Innovation; Aeronautics and Space; Electronics; Agriculture; and Creative and Design Industries.
The morning session will also enable our business delegates to share their experiences doing business between our countries. I would like to thank our Filipino and French business representatives for joining us this morning in spite of their busy schedules. Their valuable inputs will truly be important in our goal of deepening specific areas for business cooperation. This will be contained in a summary document expected to be signed at the end of this JEC meeting.
We’ve already seen significant economic achievements obtained under the leadership of our hardworking Ambassadors Lazaro and Galey. However, I hope you are open to the idea that there remain extremely vast and untapped opportunities for growth in trade and investment between our countries.
I, for one, would like to see more French business people engage with counterparts from the Philippines in spite of the seeming geographical distance. The Philippines is continuing its growth story – something that many of our country partners from Asia-Pacific, the Americas, and the Middle East have already recognized early on. In recent months, we have had business engagements with multiple European countries, as well. These were done either through the JEC platform, through inbound business missions, or both.
I am also proud to say that numerous French business students complete their internship in the Philippines in social enterprises such as the Gawad Kalinga. This is quite significant as the country develops its image as a veritable laboratory for the incubation of social tech and civic tech projects that aim to address needs of local communities.
Four weeks ago, our country also welcomed a group of French electronics companies from ACSIEL that responded to the call of internationalization by visiting the Philippines. Why the Philippines? Our country has global expertise in hardware and software technology that make it a potentially viable business partner as the world enters the age of artificial intelligence, Industry 4.0, and the Internet of Things (IoT).
Many of them have seen for themselves and been personal witness to the Philippine growth story.
The Philippines, I must say, has been growing consistently, at the rate of 6% for the past 15 quarters and has definitely broken the boom and bust cycle of the Philippines, being experienced in the 70s and 80s. No wonder the international credit agencies, the S&P raised our credit rating to BBB+, just below the A grade.
The 108 million Filipinos, whose average age is 24 years old, will also sustain the engines of growth of the country. Our young and educated population is placing the country in a demographic sweet spot, and the way I see this is providing a bigger consumer base for the country, as well as a bigger pool for manpower resources. Many of our graduates are in the S&T field, about 10% of the 700,000 graduates every year.
As mentioned earlier to the French Minister, DTI has been at the forefront reforms, liberalization of trade areas. Aside from those reforms, the country has been working on further easing of doing business in the Philippines. Last year, the Philippines has signed the Ease of Doing Business Reform Act, that will simplify requirements and procedures. And we will continue to simplify them as we move forward.
The other significant reform, as we have mentioned to the minister, is reforms in the Foreign Negative List, where will we open more sector to allow greater foreign participation. This will be in public service and retail trade.
Part of the reforms being instituted by the current administration is the acceleration of infrastructure, where the Philippines is in a catch-up mode. We used to spend only 1-2% of GDP. And during the Duterte administration, we have levelled it up to 5-7% of GDP. That is in an effort to catch up in many infrastructure projects, and as an effort to develop more regional centers in outside of Metro Manila and lower also the logistics cost.
The Philippines benefited and continues to benefit from the EU-GSP+, which has provided market access to 6,274 local product items into the EU. And, as mentioned to the minister, we would like to maximize the utilization of our GSP+. I must say also that only about 6.35% of Philippine products under GSP+ went to France, so we hope we can increase this number. Moreover, 17% of Philippine exports to France—including spectacle lenses, crude coconut oil, brassieres, vacuum cleaners and canned tuna—benefited from the GSP+ scheme.
Going forward, the Philippines looks forward to pursuing the PH-EU FTA to continue the inroads provided by the EU-GSP+ including micro, small and medium enterprises. This is especially as we already recognize that these platforms, along with the PH-EU Partnership and Cooperation Agreement (PCA), are critical in creating the framework to enhance both PH-FR and PH-EU relations.
Please keep these developments in the Philippines in mind as you engage in your discussions in the JEC today. It may help you have a broader appreciation of the business cooperation opportunities we may mutually pursue to elevate our relations further, and optimally benefit from the growth potential of our economies.
As Undersecretary Rodolfo and Deputy Director Bories lead you in the JEC discussion today, allow me to leave you with the words of French writer and aviator Antoine de Saint Exupery, who once wrote: “We see well only with the heart.”
Dear colleagues. See well with your hearts, and realize that there is so much prospect happening already here. And that so much more is about to be discovered and achieved.
I thank you for taking this journey to choose the Philippines. I also thank the minister for taking time to visit the Philippines, and only the Philippines. I thought this was part of an ASEAN tour, so we really appreciate your intention to visit only the Philippines.
Merci beaucoup. Salamat po at mabuhay kayong lahat.
Keynote Speech of Secretary Ramon M. Lopez, EODB Gabi ng Parangal
KEYNOTE SPEECH OF SECRETARY RAMON M. LOPEZ
EODB GABI NG PARANGAL
June 25, 2019, PICC, Pasay City
Ladies and gentlemen, good evening.
Thank you all for being here tonight. As the Secretary of the Department of Trade and Industry (DTI) and Chairman of the ARTA Advisory Council, I am certainly proud to be in the company of reform-oriented individuals. Together, we’ve been working hard in the past years towards making our country more competitive.
Looking around the room, we have the movers and shakers from both government and the private sector who took action in making doing business easier. Yes we have accomplished some things but really there’s long way to go and were exerting all efforts in making sure that we can have a better ranking this time around this year in 2019.
And I am very very happy to, I’m preempting my speech because I’m just excited because that all these reforms that we’ve done. This year were submitting 43 reforms. Hopefully all will be credited by the World Bank IFC.
As you know what happen last year, we have a big issue, we file a protest there’s an indicator that was not I guess even the proper score and therefore our rank dropped. And we were not accepting that rank. Actually, it’s still under protest. And we made that public we filed into the World Bank IFC, they recognize their mistake but they’re not about to change the ranking.
They said that lets go on with this year’s survey and let’s proceed with the correction on the indicator all we as all the other reforms of the other indicators. Hopefully, we can have a score better than we had achieved. I think 3 years ago or 4 years ago. So hopefully, we will see that ranking really will improve in October, so mag eembargo muna kami so titignan naming kung talagang lumaki. And I’ll bet Usec. Rowel’s salary that it will improve. Our ranking will improve noh.
So in push for ease of doing business, In 2016, President Rodrigo Duterte promised that his administration would be run on a platform of Tapang at Malasakit. That is, this government would not only be tough on security issues, it would be more responsive to the needs of our people.
This platform was embedded in the President’s 10-point Socioeconomic Agenda that he announced during his first State of the Nation Address (SONA). Among the priority points of the Agenda was the need to increase the competitiveness and ease of doing business in the country.
This is because we believe the government should be the prime enabler for business. This means creating the right business environment, attracting investments to improve domestic capacities and generate jobs, and making our industries innovative and competitive.
More importantly, we’re committed to promote Micro, Small, and Medium Enterprises (MSMEs), thanks again to Senator Migz, our biggest supporter of MSMEs in the Senate, so that all Filipinos—especially those in the countryside—can be empowered to set up their own business.
The President formalized this aspect of the Agenda when he signed on May 28 last year Republic Act (RA) No. 11032, or the “Ease of Doing Business and Efficient Government Service Delivery Act of 2018.” At nandito po ang Ama ng Ease Doing Business Law. Next to President Duterte, sila po ang masasabi nating the Father of Ease of Doing Business at ngayon po ay masasabi ring the Father of the Anti-Red Tape Authority. This is better known as the Ease of Doing Business Law.
The rationale behind the EODB Law is that it pushes for the following in government procedures and processes. These are: The efficient turn-around and adoption of simplified requirements and automation if I may add. Expediting business and non-business related transaction remember the two strike policy. Talagang mauubos ang empleyado sa gobyerno ‘pag may two-strike policy. First strike, suspended. Second strike, di lang suspended—termination. Wala pang retirement pay, makukulong pa at may penalty pa—so talagang marahas. And then promoting investor confidence as well as e-government system. At ito pong marahas na pag-iimplement ay ibinibigay po natin sa ARTA, Deputy Director General Nes Perez. Maging marahas pero risonable.
The EODB Law also created the Ease of Doing Business/ Anti Red Tape Advisory Council (EODB/ ARTA Council), as well as ARTA, the Anti-Red Tape Authority. I guess the good news is that meron po kaming isang ni-recommend na magiging Director General na mismo kasi alam nyo naman ang employee number one ngayon ay si DDG Nes Perez galing po sa Department of Trade and Industry siya, former Assistant Secretary at magkakaron na rin hopefully, in the next few days announcement po ng bagong Director General. Meron po kaming nirecommend na bagong pangalan di ko po pwedeng iaannounce baka dahil di pa napipirmahan at mahirap na mapasubo.
RECOGNIZING EODB PARTNERS
In the wake of all the work we’ve done, we decided to host this “Gabi ng Parangal” to show DTI’s appreciation for our partners both in government and in the private sector. Ito po ay idea nila Usec. Rowel at Assistant Jean Pacheco at kanyang team para talagang mabigyan ng parangal kayo pong aming mga kapartners dito po sa larangan ng pagbabago towards Ease of Doing Business.
Specifically, DTI wanted to pay tribute to the concept of the whole-of-government approach. We are particularly proud of the laws enacted by Congress that would benefit the country’s competitiveness ranking. We are also equally thankful for the swift action by the Supreme Court when we made representations on what reforms would create an impact.
Of course, we could not have done these without the support of the President himself and the Executive Branch. Likewise, we are grateful of the contributions from the many agencies involved in the many aspects of the business process, like Starting a Business, Dealing with Construction Permits, and Registering Property, to name a few.
We are particularly grateful to the Quezon City local government kahit pinapasa na ninyo ang pagiging leading agency in the survey. Kami po ay nagpapasalamat sa inyo dahil ang dami po ninyong naitulong sa cooperation of all levels of the LGU that really really tremendous. And syempre pinapasalamatan po natin kanina ang Quezon City Mayor Herbert Bautista. For the past years Quezon City has been living in a fishbowl, with all eyes—including the World Bank—focusing on this representative city of the Doing Business (DB) survey.
Before the term of Mayor Bistek ends, we would like to thank him and his team for their heroic service in promoting ease of doing business and serving as an example for all of us. Isa pong maganda at malakas na palakpakan.
IMPROVING EODB AND COMPETITIVENESS
While the EODB Law is our flagship law to promote ease of doing business, we’ve implemented reforms in our drive to improve the country’s ranking in the World Bank’s DB survey.
Among the ASEAN economies, the Philippines has ranked 7th in the DB Report for the past 3 years, besting only Cambodia, Lao PDR, and Myanmar. Meanwhile, Singapore, Malaysia, and Thailand have made it to the top 20% of countries included in the report. This is our target: to be in the top 20%.
From 148 out of 183 countries in 2010, the Philippines’ ranking in the DB Report rose 24 notches to 124 out of 190 in 2018. Di nag rose to’ actually nag worsen yata tayo dito in 2018. But, I’m preempting the talk.
From 2019 report, we improved on 7 out of 10 of the indicators so ito na ‘yung last year nag improve tayo. We remained the same in 2; and significantly suffered on 1 indicator, and that is the Getting Credit kung saan tayo nag-protest. While we contested that last indicator with the World Bank, we’ve also submitted a number of data corrections for the DB2020 survey it’s happening this year but it’s called 2020 survey lalabas po ‘yan sa end of October.
For this year, DTI has been continuing its chairmanship of the EODB Task Force and steering the implementation of our DB2020 Strategy. The strategy is two-pronged: (1) we need to pursue reforms with key agencies involved in the life cycle of a business; and (2) we need to implement a communication campaign targeting the respondents of the World Bank survey.
So this time around for the first time talagang aside from meeting all the government agency partners as well as the judiciary and even the private sectors we also went to see the respondents so at least try to reach out to them to explain all the reforms that are happening.
Because what we have observed, first sometimes the bank also asking the wrong person – the wrong respondent. In other words, they are not the one experiencing the reforms. And then worst is that minsan pinapalakad lang sa fixer and unfortunately sila ang sumasagot so they are not giving the right answer so that’s the problem.
Second, minsan there are reforms made but simply they are not aware so they are not naming or they not asking just like the story of I think Senator Migz kanina noh na di nila alam na may Citizen’s Charter na dapat na nakaspecify the list of items/documents to be submitted. And that once you submit all those documents, there no reason not to accept the document and pag nagdagdag kayo, it’s a violation. So di na pwede ‘yung everytime you go there ah may kulang pa. You submit again the document ah may kulang pa. Malinaw na may Citizen’s Charter dapat. Unfortunately I think we still need to do a lot of information awareness—information campaign. We will do that with ARTA from DTI we can help with that. To communicate better all the reforms being made.
We are optimistic as well as that the 2020 cycle will improve our country’s standing because of the strong inter-agency collaboration and greater engagement with private sector respondents.
During the visit of the World Bank Team last May, DTI highlighted the whole-of-government approach and increased private-public sector partnership. We presented to them the reforms instituted by the three branches of government that we expect will further improve our country’s competitiveness and ease of doing business ranking.
Overall, as mentioned we submitted 43 reforms and 10 data correction request to the World Bank, covering 9 out of 10 topics covering the life cycle of a business. We expect the DB2020 Report to be released this October.
PRIVATE SECTOR AND THE NCC LEGACY
Tonight, we also want to show our appreciation to the private sector, particularly the members of the National Competitiveness Council (NCC). This journey has been eventful.
This began in 2006, when President Gloria Arroyo created the Public-Private Task Force on Philippine Competitiveness. In 2011, President Aquino created the NCC. The NCC now sees its reinvention under RA 11032 with the creation of the EODB/ARTA Council.
On the positive side, we saw improvements throughout the years in the Global Competitiveness Report Card initiated by the NCC back then. These include the Economic Freedom Index, the Corruption Perceptions Index, the Global Enabling Trading Index, and the eGovernment Index.
And by the way, we have a lot of programs now on eGovernment and even starting a business, I mentioned in previous gatherings that we are attempting to do a business— all in smartphone especially for I guess the low risk business connecting the SEC, BIR, the LGUs, the Philhealth, Pag-ibig, SSS–all in. And allowing everyone to register in business right maybe on the smartphone with the assessment the place and the printing of the business for Mayor’s permit so up to that point. So hopefully in one hour, uploading all the documents that is really required.
So it’s really a eGovernment project that we are undertaking. We have benefited three Design Sprint workshops. And I tell you I experienced the prototype. They are now doing the beta format. In other words, DICT is now doing the real beta format that will be used eventually.
So pag natapos po natin ‘yung of course with the help of SEC. SEC has already improve on their system they are affected as well know and the number of people working to registration so I got a feedback earlier that the things are improving so mabilis na ang processing. And we want to see that we really move faster and hopefully investment with automation or eGovernment project.
The legacy of the NCC lives on with the DTI-Competitiveness Bureau, which is now working with the logistics services sector to improve our Logistics Performance Index. This index has dropped 16 notches from 44 out of 155 to 60 out of 160.
But more importantly, DTI is pushing for “game-changers” that will enable enterprises to become more competitive and the country to attract more investors, both local and foreign. Our target is to make the Philippines future-ready.
A NEW CHAPTER
Moving forward, our plan is to continue our whole-of-government approach.
With the enactment of RA 11032, DTI is set to turn over responsibility to the newly-established ARTA, which now has the power and mandate for the following: To Implement and oversee a national policy on anti-red tape and EODB; and Implement various EODB and anti-red tape reform initiatives at improving the ranking of the Philippines. So this coordination in various public and private agency, ARTA will now be taking the lead but DTI -- the Competitiveness Bureau will definitely still be supporting the effort.
After our full court press on the DB 2020 strategy, we shall now pass the baton to ARTA to continue what we’ve all started. But we ask all of you here today to extend the same passion and sense of duty that you have extended to DTI in the past years.
We thank the team from the International Finance Corporation (IFC)—most especially Ida, Ofie, and Atty. Lynn Barcenas—for the working hours spent with our government agencies. We are confident that your assistance to ARTA will bear more positive results.
With the new ARTA team and the new QC team, we look forward to see smarter and bolder reforms.
In closing, tonight is about appreciation, gratitude, and recognition.
On behalf of DTI, we’d like to reiterate our thanks to everyone here: the legislature; the judiciary; our colleagues from the Executive Branch; the Quezon City LGU; the private sector (particularly the NCC); and our development partner, the IFC.
Your continued support to improve ease of doing business and competitiveness in the country will help create a better business environment. This would lead to more investments and more jobs and employment, which would create a better life for our Filipino brothers and sisters.
This is because for every job that we generate for our people, that’s one Filipino family whose quality of life will be improved. Under the Duterte administration, this is the realization of true inclusive economic growth and shared prosperity for all, as well as the President’s promise of Tapang at Malasakit.
Marami pong salamat sa inyong lahat, mga kapwa kawal ng pagbabago at mabuhay tayong lahat.
Keynote Speech of Secretary Ramon M. Lopez, Opening of the Korean-ASEAN FTA Support Center
KEYNOTE SPEECH OF SECRETARY RAMON LOPEZ
Opening of the Korean-ASEAN FTA Support Center
25 June 2019; Makati Shangri-la
[ACKNOWLEDGE VIP GUESTS]
Good morning, ladies and gentlemen. Annyeong haseyo.
On behalf of the Department of Trade and Industry, I would like to thank our friends from KOTRA Manila for inviting us here at the Opening Ceremony of the Korea-ASEAN FTA Support Center.
The opening of the Support Center comes at an auspicious time when the Philippines has just started negotiations with South Korea for a free trade agreement (FTA) early this month. We were in Korea -- in Seoul last June 3 & 4, right? After the president’s visit for the NIKKIE Conference in Japan. The opening of this Support Center here in Manila is a testament of the strong bonds of friendship and partnership that ties both our countries. In fact, our good ambassador mention that this is the 70 years of good relationship between the Philippines and Korea. And also my direct uncle was also a veteran of the Korean war where the Philippines sent about 7,000 troops to Korea. And so we grew up hearing about this story as a young officer of the Philippine army then, and that’s story of our Korean war.
The start of FTA negotiations between our two countries ushers in a new chapter in the Philippine-Korea relationship. In 2018, South Korea was the country's fourth major trading partner. It is our eighth export market, and send top import supplier. In other words, we import more than the export in Korea and I appreciate the efforts right from the Ambassador to the Philippines from Korea himself, saying that in order to prosper the two countries there should be a win-win and a neutrally beneficial trading relationship. So as we try to grow our two-way trade there is suppose to be a consciousness on balancing the trade between our two countries. With the prospect of concluding an FTA by the latter part of this year. Because of that we have the signing of the FTA, we started this June that we hope to sign by November. Hopefully with the President visits Korea in November, celebrating the 70th year of our bilateral trade relationship. We are confident that trade in our country with the signing of the FTA will further expand.
The importance of this FTA to the Philippines cannot be overstated, as this will open a new and enhanced market for Philippine products. The Ambassador mentioned specifically bananas and other tropical fruits. On the other hand, Korea equally benefits, especially gain more markets access in their automative parts and manufactured products.
Overall, the proposed FTA enhances our two countries’ advantages towards mutual beneficial arrangements. Both the Philippine and Korean teams are hopeful that we can complete negotiations by September, just in time for the signing in November this year.
KOTRA Manila and the Korea-ASEAN FTA Support Center will play important roles in the realization of these plans.
Of this center, I would like to invite our friends from the Korean Business Community to expand their investment in the Philippines and take advantage of the country’s economic breakthrough. The Philippines is still the second fastest growing economy in ASEAN ranking next to Vietnam. The GDP growth still at 6.2% in 2018 and 5.6 in the first quarter of 2019 that we hope to catch up and go back to the 6% growth by the end of this year. We thus still robust stable economic fundamentals, as manifested by recent upgrade BBB+ by the credit rating groups under Standards & Poor.
Further the Philippines is a demographic sweet spot, discovery of 108 million Filipinos averaging 24 years old and equivalent to a fresh graduate and younger compared to the rest of the world. Although this is a relatively young and large population which serves as a good consumer based in the market for many of the investors in the country considering the very low unemployment rate. We suggest that we have a consumer market, a large population that is basically employed and therefore have better courtesy power. And we see that we are growing for many more years to come as we are coming from a relatively young population age.
The human capital in the Philippines is also a good source even at young and vibrant and big population. It is also a good source for manpower requirement of many investors. Which are now 700,000 graduates and about 75,000 are in the Science and Technology field. They are friendly, hardworking, honest, with integrity, trainable, fast learner and is well-versed in English.
Aside from many strong economic fundamentals and a high speed workforce, the Philippine government has enacted several reform measures to ensure the protection of investments from foreign investors.
In the last year, the President Rodrigo Roa Duterte push for the enactment of Republic Act No. 11032 or the EODB law, which enhances the existing Anti-Red Tape Act of 2007 and that law is actually in effect right now as we speak.
For the second half of the Duterte Administration, we are focused on passing key reforms to complete the economic narrative.
There are at least six key economic reforms, number one the TRABAHO Bill or the Second Tranche of the Tax Reform. Of course, we’ve been trying to have a better transition period especially those who have concern on existing of foreign companies especially the eco zones. So we are working now on smoother transition or some adjustment on the proposal. I think that is some concern mostly raised by Korean Chambers and together with the other business Chambers. Also, the Passage of the Public Service Act, which liberalize sector in the public service sector. The Amendments to the Foreign Investment Negative List or the Foreign Investment Act which will shorten further the sectors included in the FINL. And also, the Amendments to the Retail Trade Liberalization Act that shall enable many more foreign investors to come in as we adjust the threshold for the retail trade to come in especially to foreign investors who want in the retail trade sector. So coming from 2.5 million dollars we intend to bring it down to about 200 or 300 thousand dollars to make it more liberal, leaving a bit of protection still to the micro and small retailers. And then the enactment of the new law hopefully to be passed, the Innovation Act and also the Innovative Startup Bill.
In pushing for the enactment of the Innovation Act and Innovative Startup Bill, this will close the loop in our various policies to harness the Fourth Industrial Revolution and its key characteristics like AI, financial technology, and Internet of Things in bringing about changes to our businesses. Let me also add that in our recent visit the early part of this month, we were also talking about how can we support the e-vehicle industry. And we were together with the e-vehicle industry in Korea and they were of course making some suggestions on how else can we promote the development of e-vehicle in the Philippines so that we can start this new industry and hopefully to be a major player to this industry together with our Korean partners.
In conclusion, I want to reiterate that the government is fiercely committed in its support for our free trade agreement with Korea, and the continuing good relations between our two economies. Our continued collaboration will result in inclusive growth and shared prosperity for both our peoples.
Kamsahamnida. Thank you. Mabuhay kayong lahat!
Keynote Speech of Secretary Ramon M. Lopez, PHILEXPORT 2nd Quarter General Membership Meeting
Keynote Speech of Secretary Ramon M. Lopez
PHILEXPORT 2nd QUARTER GENERAL MEMBERSHIP MEETING
18 June 2019, New World Manila Bay Hotel
Ladies and gentlemen, Magandang hapon ho sa inyong lahat.
Salamat at naimbitahan din ako sa GMM. It’s my first time here after two, three years tama, on the third year June I remember three years ago about this days, same time, same day, same month three years ago we were in the period of being called to Malacanang of the South, sa Davao at that time and little did I know I would be invited to be the DTI Secretary. But it’s really good to have with you this afternoon a dialogue.
I’ve been wanting really to have a closer interaction with the export group although we do we have our regular EDC meeting that would be good to be really near for everyone especially, as we tackle the challenges in the export sector. They were presented earlier by the three speakers earlier. And we really would like to give you an update at least to give you information also on what government is doing and what else can we do to so that we can really address and arrest the weak trend of export nowadays. We want to assure you, the exporters, that the government is really working hard and we would like to do more innovations in our programs as well as in policies as we address the uncertainties of the world.
Nabanggit na ang mga challenges sa US-China trade war, but I shall be explaining to you in a while how can we really prepare ourselves to those issues. I have some numbers here but many of these have been presented earlier so I’ll just go quickly.
So let me just start with the Philippine Statistics Authority PSA numbers. As you know, every year we hear the performance of the exports and its reported month on month. Frankly speaking, month on month we have become really defensive di’ba we’ve been hearing a relatively weak export performance versus the previous year but if you are up the level wherein your growth is like single digit, adjustments do play important role. What do I mean by that, you know what’s happening, there’s been a delay in the recording and encoding of numbers on the current year month on month, and then you’ll have the adjustment the year after. So case in point, in 2017 you were supposed to grow 10% then towards about five months. In 2018, PSA announced that there are adjustments on some documents were encoded after 2018 and guess what, we grew 20% instead of 10%. So anong ibig sabihin nun, we have a higher base in 2017. So month on month on 2018, we are receiving reports that we are experiencing a decline versus last year di’ba tapos naging higher base and then in the meantime, understated yung current year. So I guess it will always be like that because you know what in 2018, yung report kanina we decline. But guess what, we increase from there’s an additional 1.8 billion dollars recorded for 2018.
So manipis lang kaya nga sabi ko from single digit decline or growth napakaimportante nung mga namimiss na ganun, eh kung 30% growth it doesn’t matter but since were like on the border line, from 2018 ang adjustment 69.3 billion dollars from 67.5 billion dollars so, 1.8 billion dollar difference that translates to about 1% positive growth for 2018. So it’s not a decline anymore. From what we heard there might still be some document that would be coming in so it’s possible there still be some adjustment. So this means that again, we now have a relatively a higher base for 2018 as we receive this correction. So month on month on 2019 again we shall expect a relatively challenge statistics di’ba as the month on month come in.
And in January to April 2019 the merchandise exports amounted to 21.9 billion dollars down to 2.1% compared to the same period in 2018. Electronics exports accounted for more than half parating electronics 55-54% percent of total exports and for the first time they recorded a negative, a decline .06%. You know electronics been growing typically 5 to 6% , so 5 to 6% growing year on year on more than one half of your total exports so means a lot. At pag iyon ang nagdecline which is now una nag slow down ito about 1.9 and now decline 0.06, napupull down na syempre in the total export performance.
The non-electronic export also drop 3.8% year on year to $10 billion dollars. So again, I just don’t want to base this on statistics there might be some adjustment again but let’s take that for a while. So the electronics if you know is our electronics business is part of the global value chain. So ito nga ‘yun sinasabi nating collateral damage that if the orders from other countries slow down then slow down din ‘yung orders satin because its doing one part of the chain. So that we are started to experience a decline for the first time after reaching 5 to 6 growth. But within electronics there are sectors that grew for the first four months. These are electric data processing, consumer electronics +17% growth, communication and radar 40.7% growth, automotive electronics and in contrast, those that contracted were semiconductors which is the big chunk of electronics sector, office equipment, telephone control and instrumentation, medical and industrial instrumentation.
In the non-electronics sector, those top export items that grew during January-April 2019 including mineral products +3%, bananas 80% and in bananas there are countries were in we tripled, quadrupled our exports, I’ll explain in a while, forest products.
Meanwhile, those major export products that recorded decreases include machinery and transport equipment, chemicals, processed food and beverages, coconuts, fresh preserved fish kasama na dun ‘yung shrimps and prawns, wood manufactures, petroleum products, and sugar.
So ‘yung shrimps and prawns I remember the major factor for this is that were supposed to have a big export of this, but the domestic demand is so strong as well because we have a fast growing economy that those exports actually returned to fill up the domestic demand rather than being exported.
Wood manufactures, if you’ll remember there’s a big wood manufacturer facility in Cavite that got burnt. It took some time I think two years before the facility was rebuilt. So really were running short of that capacity that was a full capacity, 100% for export capacity a Japanese company that we loss and only last year or in fact early this year na rebuild yung capacity. Now that there’s a capacity, yung orders from the mother company slow down, so ‘yun ‘yung problema but at least we have now the capacity to export that particular item.
Among the top ten export markets of the Philippines, only three recorded higher exports in January-April and these were US (+6%) growth, China (+7), and South Korea (+17). The rest incurred lower Philippine exports and these were Japan, Hong Kong, Singapore, Thailand, Netherlands, Germany, and Taiwan.
Also a reflection of a weaker global economy in January to April would show that out of 11 trade oriented economies, 9 show that a declined in their exports so di tayo nagiisa so di lang tayo ang nagdecline, 9 out of 11, dalawa lang ang nag continue ng kanilang growth. I think that’s China and Vietnam.
There are many factors dampening merchandise export performance. We’ve mention the weakening global tensions, weakening business sentiment to a certain extent, and the slowdown in China affected again by the US-China trade war. The Philippines, in particular, is being affected by the negative sentiments by trade friction between China and US and I mentioned already that the Philippines is part of the production network especially the region.
Another factor that we are trying to address is that the presence of mga non-tariff measures for example, if we are looking into trades and tariff reduction program among all ASEAN and trading partners, kahit nagbaba na ng tariff ‘yung mga non-tariff measures in some countries there’s still there. So in fact, we are the number one proponent of reviewing all this NTMs non-tariff measures especially in ASEAN. We’ve been telling our partners that we reduce our tariff rates pero pagdating sa non-tariff measures, di rin easily makapasok ang ating mga produkto and that’s the reason why we are negotiating hard on this aspect. And in fact, in ASEAN we are starting to move to have a review of all NTMs. There has to be a set of parameters in which a NTMs can be approve if it passes all these criteria mention in the set of parameters.
Of course, the third factor mentioned is the logistic cost (shipping, ports, telco, etc.) and infrastructure issues and the port congestion and perennial vehicular congestion. Dito naman sa mga factors na to, I must tell you that we are addressing this one. The shipping, we mention the JAO na mention pala ang JAO kanina of course the port congestion. Even prior to the JAO at least in our initiated several meetings with the agencies concerned, there are moves already done by customs so they adjusted the port rates nabawasan na ‘yung congestion and their down to I think 65 to 70% utilization so technically nabawasan na yung problema natin/nila sa congestion ‘yung isa na lang ang sinosolve natin which is the shipping rates.
Iyong shipping rates actually we have the draft kaya lang nagtagal ilang consultation ang ginawa and even among agencies there were still additional comments. So as we speak right now, the draft is with the DOTR so getting reviewed but I talked to Sec. Tugade, sabi nya that he would give that support that we need, sabi nya nga gusto mo magpirmahan na tayo. So malapit na ‘yun give me about maybe one or two weeks the draft is with our Undersecretaries right now. With the JAO (Joint Administrative Order), we hope to really identify ano na ang allowed na shipping charges or fees that will be included in that charged sheet and no longer including other charges that would simply add cost. So we are identifying already the cost that can be charged.
Of course the infrastructure, as we speak we were addressing it with aggressive infra program lahat yan we have the benefit of lowering the logistics cost as we finish all these roads, bridges, transport projects.
Legislative and policy issues: the budget, the Public Service Act, even the retail trade revision, Retail Trade law, the Land Use Act. All these are being worked on. Di umabot sa 17th Congress but we are telling them approve dito sa 18th Congress, the incoming Congress. So we shall have this certified urgent again by the President especially the PSA and Retail trade that will improve hopefully more investments in the service and utility sector, as well as the retail trade law that will encourage more investments in the country.
We’re talking also the second tranche of tax reform package, as you know this is called the TRABAHO bill and the DTI is very much in support of this. I just like to tell you that in the TRABAHO bill the reason why we’re supporting this is we should encourage more investments. On the total, those not usually getting incentives the corporate income tax will be brought down from 30% to 20% in ten years. Generally, that’s our initiative for investments to create more domestic capacity. Kasi alam nyo po ang ating problema sa totoo lang is our lack of domestic capacity. We need to revive many industries that we loss and we have to reduce the domestic capacity such that, in times when the economy is growing and there is a strong domestic demand. In that economic equation, yung consumption malakas, investment malakas, ‘yung government nagspend, saan kukuha ‘yan, domestic supply. The domestic capacity is not enough where will be getting imports that’s why we’ve been importing a lot. Our import growth has grown much faster than export growth buti kung export is growing it’s relatively flat a bit of grow 1%. So we really need to build that domestic capacity. So we need all this investment promotion policy and programs to happen. So when we talk of policy, aside from the usual investment promotion policy where we give tax incentives, that will continue even under the TRABAHO bill, meron pa tayong income tax holiday aside from lowering income taxes, there will be incentives to be given aside from income tax holiday, nandyan pa ‘yun duty free of importation of capital equipment. But in addition, we should have additional deduction on R&D that’s a 100% so double deduction on R&D, double deduction on training, 150% deduction on direct labor, 150% deduction even on infrastructure that you will spend around your plant.
There will be NOLCO and 50% additional deduction on the increment of domestic input to encourage the local content. In others words, rather than import, you source it locally so there will be an additional deduction. So there’ll be more deduction in place that is the reason why we are supporting our tax reform the TRABAHO bill.
What we have just to really manage is the part of the PEZA. The PEZA existing exporters, because this is the guys enjoying that what we called perpetual GIE of 5%. As we know, in all countries, Philippines lang ang nagbibigay ng perpetual, may forever, eh sabi wala daw forever, and it has be a time bound incentives. These companies are enjoying this perpetual 5% GIE, these are high performing companies - labor intensive, 100% for export, they employed 10,000, 20,000. Many of these are as you know Japanese, Korean companies, we just have to manage that transition so they won’t leave otherwise, we will suffer again from a reduction in domestic capacity. And therefore, nothing to export kahit bumalik ang global economy bounce back for example. By that time wala kang capacity because all your exporters probably would leave you. But we don’t want that to happen and therefore, so we just have to manage the transition cautiously. And how are we going to do that so there are ways we are talking with DOF right now and also with Senate. So that we can apply certain provisions especially for the existing PEZA exporters, the locators who are already enjoying the 5% GIE. Sila lang ang tatamaan dito sa TRABAHO bill because ‘yung forever magiging time bound.
The time bound it won’t be implemented like tomorrow or the day after the bill is passed. That’s the transition that we’re talking about will it be 5 years, 10 years or 15 years. Of course, were looking for a longer transition. The other option of course, is probably we’ve been talking to them some of them are saying don’t remove it. If you want, you can increase it because TRABAHO bill is supposed to be revenue neutral. You reducing the corporate income tax dapat meron ka din mabawasan na additional revenue by lowering or making time bound incentives or if you don’t cut the incentive you increase the current, instead of 5% GIE we need to understand that the exporters are open to maybe 8% GIE so, at least there might be 3% additional GIE tax rate on the gross income earn.
There are many ways so that we can apply the grandfather rule. In other words, if you are already enjoying this incentive, you can continue to enjoy but at a higher rate so that meron naman gain on the revenue. So, this are the things that we are discussing right now. Hopefully that move certainly will help encourage more investments and create greater domestic capacity either for the domestic market or for the export market.
There are varying reasons behind the decline of the miller sectors, madalas napapagusapan of course ‘yung issue sa sugar so madalas natin dinidiscuss na ito. We’ve been talking to the SRA also. But here’s the thing on the the sugar. On the sugar, as a general policy just like with all of you here - your manufacturers, your exporters, as much as possible we’d like to have the domestic capacity, source it locally. Let’s support the domestic production. The producers as well as, in this case the sugar, the farmers, the millers. But there must be an end to any support that has to be given. In other words, we will support them to the extent that they are competitive. Kung di sila competitive in the same way that you import it. You probably have about 50% 60% of the cost compared to buying locally then we should certainly allow importation. That’s the point there, mamanage natin ‘yun to the point na magallow tayo ng importation especially for end users pag hindi mabigay ng SRA or ng mga domestic producer ‘yung competitive price and supply that is needed by the end users.
This will be a working progress but frankly if we talk of liberalization while we are studying it, I think the quicker approach now is to manage the supply of sugar so that immediately they should be able to bring to you the more competitive sugar import cost so that especially those exporters can be competitive as well.
Because of high cost of sugar, for example, the high cost of local mango, because may shortage din ang mango, generally speaking there’s a shortage. Nagkaroon lang delay ng harvest so biglang naglabasan recently but really there’s a shortage. So problema talaga agri inputs especially tayo ‘yung agri processor. That’s the reason we have to work closely with agri. We’ve been telling Secretary Piñol na let’s work together closely and let’s focus on high valued crops.
Then the RAPID project mentioned by Ms. Diana is actually moving to that direction. That’s a project is supposed to link agri production, may agri technology support, bigyan sila ng seeds --- the four sectors coffee, cacao, coconut and fruits and nuts. Bigyan sila ng technology on the agri side, seeds, fertilizer and other training so that their yield and productivity will improve and the output would now be given to the 1,000 SMEs also identified. They are the ones who will process it and then will export it. So ‘yun ‘yung RAPID project -- that’s the way it should work, that’s the project that will strengthen the link between agri and industry, so that’s one example.
Then we have this ongoing project with FDA, which is another challenge to many of us hanggang sa napalitan na ‘yung Director General but definitely ‘yung system and people problem nandun pa rin but anyway meron kaming winork out with FDA pinapilot test ngayon in some Negosyo Centers first in NCR wherein for micro players di na kailanganin ‘yun CPR. LTO na lang no need for CPRs. And then they can start to operate already. But if that becomes successful, hopefully we can also do it for the less risky products even for exporters, at least for if that can be done but I’m sure buyers might be looking also for this certification. But the point there is dapat mabilis din ‘yung processes nila and then be subjected to EODB.
In EODB naman, yes wala pang Director General but there will be one hopefully in the next two weeks also kasi meron na kaming nakapila na kay Presidente na daw na who will be the Director General. Nahirapan kami to endorse about three people, nagbaback check, may problema so palit ng palit another ano nanaman kami dun.
I’ll tell you that law is already effective so kaya nga namin sinasabi kahit wala yung IRR self executing ‘yung law so if there are complaints that you like to file, file it already. We have the ARTA already it’s headed by a Deputy Director General si Ernesto Perez who also came from DTI, our former Assistant Secretary.
We’ve been receiving complaints, they are able to address many of these complaint especially ‘yung mga agencies ‘yung tumatagal ang applications or pinahirapan sila lumalabas agad. Because meron tayong 3,7, 20 days rule in that EODB. That is a law that should be implemented and the agencies are aware that this is a on a two-strike policy. First strike, they can get suspended. Second trike, they will be terminated. No retirement pay, may penalty pa sila and they can be imprisoned. This is really a harsh law we just have to start implementing it actually in many cases na implement na ‘to. We don’t want naman na marami ‘yung puro inaaksyunan kapag dinala lang ng ARTA. What we’re saying is that part of the law is that all government agencies should continue to streamline by themselves and also automate that’s mandated in the law.
There’s also a citizen charter wherein all frontline service agencies, wherein the documents required to process where all listed there. In other words, they cannot ask for additional document every time you submit all the documents listed pag kumpleto na ‘yun, there’s no reason not to accept. Malinaw dun sa citizen’s charter what should be submitted.
Also another issue mention especially in chemical sector, we need to rationalize ‘yung PNP Regulations on Licensing, Import, Transport, and Distribution of chemicals used in export products.
To future-proof Philippine exports from both internal and external challenges. Moving forward, we’ve proposed the following points but before that let me to tell you that ‘yung pinaka key dito, I’ve been mentioning domestic capacity. Industrialization strategy is our best offense for export development strategy. In other words, we really need to a greater capacity and a competitive, innovative set of industries that we need to develop.
We need also to have this coherent policymaking. I’ve mention agri industry, integration for example. We need to diversify our export products, services, and markets. Si Mr. Sergio Ortiz Luis mentioned earlier some of the export champions we need to have more of that because there’s a study that showed that medyo limited ‘yung spectrum natin when it comes to winnable exports so we need to develop more products and at the same time look into non-traditional markets.
There are several goods that we can consider as export growth drivers. The consumer electronics, motor vehicles and parts, forest products--that’s the plywood and fiberboard, even office equipment, the wearables, footwear and the handbags, ‘yung handbags or the travel goods nasama na sa GSP in the US. So, we are working now on the footwear para masama na rin sa US GSP.
Of course, we have arms and ammunition, high-value coconut products so ito ‘yung mga moving forward natin na kailangang madevelop pa. Activated carbon for example, innovative products from globalizing startups so meron tayong lalabas na din na start up community na law also the innovation act about the design.
For services, we can consider also the following: audio-visual and creative industries (like film, animation, and game development); software development; healthcare information management systems; and tourism-related services.
Going back to ways that we can future-proof our exports, a third point is growing innovative and globally competitive manufacturing, agriculture, and services sectors. We also need further integration of our industries and businesses in the Global Value Chains through our Inclusive, Innovation-led Industrial Strategy.
We need to increase our domestic capacity to supply exports as mentioned. At the same time, we need to consider incentives for strategic industries in manufacturing and services, like IT-BPM, AI, and tourism. So even in the TRABAHO bill the Tax Reform bill there will be a continuing incentives also for the strategic industries.
We also have to build or improve our capacity to support ‘yung export promotion. So if you have the capacity already that’s the time we can really focus on export promotion so mahirap din magpromote kung wala ‘yung capacity pag umorder na ng malaki.
For our commercial attaches based in abroad, we have about 24. Dalawa ‘yung mandate nila from the DTI now. First, is to analyze the condition the bilateral between that country and the Philippines. Why do we have with any or if ever a trade deficit. They are not supposed to just attend meetings, they will now have to lobby or work on certain policy, tariff rate negotiation in those countries. For example, ‘yung kanina nababanggit ‘yung banana. We’ve been working on banana, pineapple, mango, everytime we meet bilaterally with Japan, South Korea. Kaya nagkaroon tayo ng usapan on FTA starting the FTA talks with South Korea it’s because of our push to revise the tariff rates on banana, for example. We are the biggest supplier of banana to South Korea. We use to cover about 95% of their market now it’s down to 85%. The bananas from Ecuador, from South America, they’re penetrating now countries like in South Korea.
In Japan, the same story, we are the biggest supplier of bananas but our share is going down. But still we are dominant were like 70-85% supplier of bananas.
In Japan, we have good accessibility but our tariff rates are at 18% so mataas pa din so were saying how come in with other countries their tariff rates on bananas are in their single digit level. So that’s why we are really pushing hard to negotiate with them and bring down the tariff rates to have a better market penetration even though we are the biggest already. We just don’t want to lose the market share, that’s the reason why with our push on lowering tariffs in Japan. Sabi naman ng Japan, sige let’s discuss this in PJEPA FTA natin. So nirereview ngayon ‘yun the same way lang kaya na trigger ang Philippines- South Korea FTA, it’s because of this push kinukulit natin sila sa tariff revision.
To revise the tariff, di pwedeng bukas lang irevise ‘yan dapat merong inirevive mo yung negotiation and of course, something has to give also in our products. If they give us this market access, we have to allow them certain market access especially to industries na wala namang domestic producers and we can also offer so ‘yun ‘yung minamanage. Just to let you know how important this topics are even up to the bilateral with our leaders.
President Duterte, this is already part of his talking points as he meets Prime Minister Abe for example, or even President Moon when we were in Korea last year, June din last year. Niraraise itong mga issues on tariff rates on this particular specific items. Because of that we want to really level up the discussion there so that the mandate and instruction will come from their leaders kaya umandar kaya nagkaroon ngayon ng mga all these FTA discussions or review of FTA.
We’re also doing the same with Australia. Tariffs are zero but because of NTMs, we cannot penetrate them. We cannot sell our Cavendish banana. Dami nilang nirerequire, non-porous plastic, packaging, eh di mabubulok ‘yun pano pagdating dun so spoil na ’yun so madami tayong kinocontest, but that’s part of the international trade negotiation.
And the other thing of course, one, we have the GSP+ to EU and GSP to US. To EU, we have about 6,274 items zero duty, so that in effect should attract like China companies to locate in Philippines, because like in China would export their bicycle to EU di lang may MFM rate meron pang minsang anti-dumping duty on top of the MFM rat. So duty probably from 25 to 50%. But if they relocate in the Philippines, and that’s the reason why we’ve been getting Chinese locators here, is that because from here to the EU, zero duty for that example in bicycle. So hopefully, we can catch up.
The reason why we’re lagging behind ‘yung sinasabing countries that are gaining from the China and US, why? Because for many years, Japan, Vietnam, China they’ve been preparing already with their infrastructure, tayo ngayon pa lang tayo nagkacatch up mode.
You’ve heard the report of the Build Build Build team, like the Philippines has been underspending for many years 1 to 2% only of the GDP, so now, were spending 5-7% GDP catch up mode. And also the other requirement that affect logistics, modernized especial eco zones, data connectivity issue ‘yan. Infrastructures must be in place so that you are prepared. We just have to continue with many more reforms so that we can really attract more otherwise, we are at the disadvantage, that’s the reality. We’re able to do some of these reforms already in the first three years hopefully in the next 1-2 years maimplement na din ‘yung ibang reforms.
The other are promotional in nature, of course, we have a very dynamic CITEM all these business missions, trade missions outside, FAME, IFEX etc. We’re an active participant in the CIIE, Mr. Amores, last year China International Import Expo, we invite everyone to be part of that I think we have 100 exhibitors this time, around last time about 50 only. For the second time, it’s their way to encourage to more imports into their country so baliktad ‘yung import, ‘yung supplier na, exporters from other countries yung mag-e- exhibit in that 40 hectare expo, so tayo participant ‘nun since last year.
We need to push for trade promotions in non-traditional markets. There’s lot of discussions with Russia, with Africa, South America, South Asia. We’re going to Chile also for possible FTA if not PTA muna. PTA is Preferential Trade Agreement goods muna not the other aspects like in FTA we discuss services, investment and many other goods kahit PTA, we are working on those. So that in goods we will be able to penetrate their market, and Chile would be the gateway in South America. In Africa, again also in the world fast growing economies in some countries in Africa.
Whole-of-government approach, the DTI has signed a Memorandum Circular with other government agencies to support the Philippine Export Development Plan (PEDP) 2018-2022. This will prioritize addressing core issues like supply, competitiveness, port operations and logistics, and infrastructure gaps that we had discussed. We have submitted this to the Office of the President in August 2018, and more follow ups are being made, so sabi nasa office na ng Presidente for signature at kahit wala naman ‘to, gumagalaw na tayo so importante dun, but of course, in all other agencies are just implementing also the programs especially in infrastructure that we mentioned earlier and other policy reforms.
DTI remains confident that we are still on track in meeting our total export targets to reach the range of US$122B to US$130B by the year 2022. So may challenges, but looking into 2022, doable pa rin ‘yung projects that we have set. As mentioned in 2017, we posted very strong growth of about 20% so medyo maganda ‘yung base period natin, tumaas din ‘yun.
More importantly, DTI has been pushing for investments that will increase our domestic capacities for both export and supplying the fast-growing domestic demand. This, in turn, will help generate more jobs and employment for our countrymen.
In conclusion, I want to reiterate that the government is fiercely committed in its support for our exporters. That’s why even with the uncertainties in today’s global trade, we’re working hard to find solutions.
We’re also determined to reach out to you and gain your inputs on how we can resolve these challenges. This is in line with President Rodrigo Roa Duterte’s promise of Tapang at Malasakit, that the government is responsive to your needs.
We believe that through continued collaboration with private sector partners, we can strengthen the exports sector even as we fulfil the demand of the domestic market. This, in turn, means better business and more jobs for our people leading to greater inclusive growth and shared prosperity for all.
Thank you at mabuhay po kayong lahat.
Speech of Secretary Ramon M. Lopez, RAPID Growth Launch
SPEECH OF SECRETARY RAMON LOPEZ AT THE RAPID LAUNCH
MAY 24, 2019, WORLD TRADE CENTER
Thank you and good afternoon. It’s great to be back here. We were here earlier to launch the IFEX and now we’re launching a very special project, a project close to my heart. Because it’s a project that really would empower and enable those at the bottom of the pyramid.
RAPID, as explained, was about increasing rural income and solving poverty. Those are the key objectives of our president, President Rodrigo Roa Duterte. By the way, the previous speaker is not the president. He might have some semblance but he’s not the Mayor.
The beauty of this project is coming to fruition everything we’re working for, especially our field—a much stronger linkage between agri and industry. We’re grateful for the Department of Agriculture. Secretary Pinol is unfortunately out of town so he couldn’t join us. And also, of course, our different agency partners who are part of the steering committee. Our thanks of course to the next speaker, IFAD Country Director, Alessandro Marini, our Usec. Macatoman who’s always been in support of projects especially on the trade promotions side, with CITEM. Thanks for allowing RAPID Project to be launched here in IFEX. The youth representative of the MSMED Council, Archie, thank you for joining us. The project representative of the RAPID Project, Dir. Lydia Guevarra, thank you for joining us.
Before this got the approval of the ICC, the Investment Coordinating Council, and all our DTI family, the directors around us, the regional and provincial directors. All of us are really working toward this agri-industry integration. To us, what is needed is making sure our farmers have better income, better productivity, better yield in their production, and better output that will support the requirements in the micro SME sector. Basically, SME, the bigger ones. Because these are guys that will be able to export or supply to the domestic market in a big way. To create a bigger requirement, a bigger demand for agriculture produce.
So it’s really important that, as mentioned, that this RAPID project is market-driven. Everything that is produced in the value chain, what will be planted, coffee, cacao, coconut, fruit nuts, will have the demand, will have the market that will be processed by the micro SMEs. The project is really a very specific in terms of identifying the beneficiaries. We’re talking of specific numbers and names of beneficiaries. About 1,000 micro SMEs will be supported, their business models leveled-up, better packaging of products, more innovating of agriculture products that will make it marketable in the first place, so there will be greater demand that will be required from the agriculture sector. That is the link that we are strengthening.
The agriculture sector will also be supported through technology, seeds, and all that to improve the productivity and soon their income, that’s the bottom line. We’re excited to talk about this project because this is not just in paper, there will be actual support to the agriculture farmers, as to the tools, implements, but at the same time making sure that productivity goes up, income goes up, and on the SME side, improving also their business models.
Talking about the grassroots, I must also recognize a good friend, Dr. Alip who is the founder of CARD MRI. Kung hindi niyo alam, CARD MRI is the biggest microfinancing and microinsuring company institution in country, with over 6.5 million borrowers. I’m amazed. He’s also helping us sa program ni President Duterte na Pondo sa Pagbabago at Pag-asenso (P3) Program. We only have about 80,000 borrowers. Our portfolio is just PHP 2 billion so far. With the additional budget of PHP 1.5 billion, so that’s 3.5 billion. We’ll be able to service more than 80,000 this year. But he has 6.5 million nationwide, including Muslim areas. He has, by the way, actually joined the program using his own money.
He added Php 200 million to Pondo sa Pagbabago at Pag-asenso to augment what the government has provided. He has insured, I think up to PHP 22 million, microinsurance. I’m mentioning that because our emphasis is grassroots. The DTI, for the information of everyone, has very small budget. I think that’s about Php 4 or 5 billion. We’re 0.3 percent of the total budget. We’re only reaching up to the municipal level. We’re targeting to put one Negosyo Center per municipality. We’re not up to 1,070. We’re only up to that point.
When you talk of grassroots, you talk of the barangay. Ilan ba ang barangay? Mga 45,000. We’re not even there. What we’re trying to do is extending our network not using our budget, but using the LGU budget. Partnership. Making sure that for every barangay, there would be a Negosyo Advocate. Making sure also these Negosyo Advocates will link up with the Negosyo Centers. Because DTI resources are so limited. Our frustration is that we don’t have a Negosyo Clinic for every barangay. But we’re like entrepreneurs. We find ways.
Our President always tells me that you just empower those who are weak because when you empower the bottom of the pyramid, you empower the nation. And RAPID is one project that helps us achieve that.
Maraming salamat po.
Speech of Secretary Ramon M. Lopez, IFEX Philippines NXTFOOD Asia
SPEECH OF SECRETARY RAMON M. LOPEZ
IFEX: Next Food Asia Launch
May 24 2019, World Trade Center
Good morning everyone. It’s so great to be here again at CITEM for an exciting event. IFEX has been a much-awaited event because it really showcases a lot of exciting new products, food, innovative products produced by micro SMEs, the sector that our President would really like to empower. Because he believes that when you empower MSMEs, you empower the nation. And that is the commitment of the Duterte administration, to make sure that the bottom of the pyramid is uplifted.
So with that, allow me to dispense with the greetings. But allow me to say a special thank you to Atty. Betty Medialdea for gracing this event. I know you’re very busy with your full-time work in the private sector, doubling also as the head of the Cabinet spouse group. Now representing Madam Honeylet Avencena, who I must also give credit to for being active in attending almost all our launches, especially launces, trade fairs, OTOP Philippine Hubs, representing the President.
The President also attends our activities from time to time as well. I remember our MSME Summit when the President was there. It is really his priority to help this sector. Maybe that’s why he thought of me to join his administration in the DTI.
I would also like to thank our private sector partners, the PHILFOODEX in helping us. And of course all the Excellencies, Mayors, our partners from the different agencies. Congratulations also to CITEM and the Regional Operations Group, helping all these micro SMEs. Our Regional Directors and USec. Zeny Maglaya and all the provincial directors here. And the foreign counterparts, the commercial attaches from the PTIC—Philippine Trade and Investment Centers.
I’d like to give special thanks also to the exhibitors who are here with us. The 600+, above 50 would be foreign exhibitors. I’d like to welcome also the very important foreign buyers. Acknowledgment also to our partner from Singapore, the celebrity chef, she’s back there. She’s, I think, the godmother of the Singapore culinary ecosystem. Welcome to our IFEX show.
When we have events like these, I really feel the empowerment given to micro SMEs. The DTI provides 360-degree support from entrepreneurship training, mindset change, how to differentiate you product, product development, financial literacy, and the works.
We also have microlending through our program with the President, the Pondo sa Pagbabago at Pag-asenso or P3 Program. Some equipment, Shared Service Facility assistance will give greater productivity to groups of farmers and cooperatives so they can further process their produce and convert them into higher-value-adding products.
When the products are there already, the problem is, where do we sell it? How do we market it? So platforms like this are really key to giving exposure to the products of micro SMEs. But we should take note also that not everyone can participate. It’s important that micro SMEs are assisted to level-up their products so they can deserve to be here at the expo. Otherwise, they will be featured in smaller trade fairs. But in IFEX, we feature those that continue to upgrade their products. These are really the products that we can boast as the next exciting food coming from the Philippines.
There are premium seven products being promoted. We’re happy to note that some indigenous products long been in the country being used by our chefs in the culinary scene, the likes of turmeric, yellow ginger. Even ube, used to be referred to as purple yam, I think is now known worldwide as ube. Everywhere in Europe and the US, you can hear ube.
Even in the future, the so-called bagoong or shrimp paste, which is really an acquired taste. It’s a favorite side condiment of Filipinos. It’s an acquired taste, like blue cheese. But it does magic to your food when you eat it with other viands. I think it’s being noticed now, in Europe as well. I don’t what they call it, but here it’s called bagoong. It really gives a unique taste profile. These are the things that we really like to showcase because we believe that these are the future. Promoting these products would give more opportunities to micro SMEs in the country.
Empowerment is really important. We want to bring growth to micro SMEs. Otherwise, they will probably remain where they are. Our intent is to give them opportunities. Locally, I always boast of the Go Lokal! project. It’s like the preparatory stage of these marketing platform that we have. Imagine micro SMEs who normally don’t have access to mainstream markets which are the malls, would now be given access exposure to the malls every day. When they are exposed and discovered by foreign buyers, then that is the key now to their growth. These are really steps to make businesses reach the next level and maximize their full potential.
Now is really a good time to be involved in this micro SME development, in doing business in the country. We are on a good run in terms of economic growth. It’s a good time to business. In the Duterte administration, we have accomplished much stronger growth rate, growing by 6% continuously in 15 quarters. I did not count the last quarter because the budget was delayed in approval. But that’s just one quarter, we shall catch up and finish the year back at 6% growth. Not everywhere in the world that you can see a 6% growth rate. We are the envy of many countries, every time we are outside. The second-fastest growing economy in this part of the world.
Unemployment is going down 5.2% that used to be 6%. In the growth that we’re having, consumption has gone up recently, 6.3%. The more important thing is the preparation for future growth, this would be in terms of infrastructure. Investment here has been experiencing double-digit growth rates. Again, except for this quarter because of the budget challenge. But as we speak right now, the Economic Development Cluster, which I missed, is talking about how to catch up in the rest of the year so we can still achieve double-digit growth in construction.
You know construction joins manufacturing in the industry index. And industry growth rate has also been performing higher than years ago, we are now hitting 5-6% growth rate, when in the past we were just hitting 3%. It was always the services sector, they’ve been growing in 5% in the recent years and that has been sustained. The industry would have to grow and create more jobs.
This afternoon, we will be launching the RAPID Project, rural agriculture and industry interlinked. This will make sure that as we develop the micro SME sector, all the requirements from the agriculture sector would have to be met and we have to also improve the productivity and yield of the agriculture sector. So the requirements on mango, coconut, coffee, cacao, etc. would be produced with better yielding and higher productivity for the farmers which will result to increase in rural income and help solve poverty. This will also make sure that their products will be value-added in processing in the industry and manufacturing side. We will be launching that project this afternoon. It’s a project assisted by IFAD and we’re excited with that because it’s giving importance to a strong agri-industrial link. And when you look at the food businesses around here, these are products of a strong agri-industrial link. From processing of these agri products to food ingredients.
Again, let me just congratulate everyone. This is really an exciting event that’s being pushed a lot by DTI, CITEM, and being supported by President Duterte because he knows that by doing this, we are empowering small guys in the country.
Once again thank you and enjoy discovering the next food Philippines.
Speech of Secretary Ramon M. Lopez, OKB @ Shangri-La Launch
SPEECH OF SECRETARY RAMON LOPEZ
OKB @ Shangri-La
May 22, 2019, EDSA Shangri-La Plaza
Babanggitin ko po ulit ang aming mga ka-partner. Nangunguna po ang ating venue partner, Ms. Danila Fojas of the Shangri-La Plaza Group. Madam Med Villanueva, very inspiring talk. Kayo po dapat ang keynote speaker. I can feel the passion in your talk. But I didn’t realize that you started one year old, when you said na 43 years na kayo sa PHILEXPORT. Maaga po pala kayong nag-umpisa sa PHILEXPORT.
Of course to the OIC RD Leah, Mayor Patricia Gonzalez-Alsua of Ligao City, Mayor Amy Villanueva of Tiwi, Albay and Mayor Luistro, and the representatives of the local government units. To our partners, sa mga exhibitors po, mga mahal naming mga micro SMEs. Ang partner po natin sa Department of Tourism, representing, kanina nabanggit po si Ma’am na representing Sec. Berna Puyat na aking seatmate kapag meron po kaming meeting.
Magandang hapon po sa lahat. It’s always great to be here sa Shangri-La. At congratulations sa OKB. Salamat sa Shangri-La, for the first time, nag-partner po ang Shangri-La sa trade fair ng Department of Trade and Industry.
Appropriately, dito po sa OKB because of, I would suspect, the affiliation of Ms. Fojas being a Bicolana as well. Sana ito po ay simula lang ng ating pagsasama at partnership sa mga trade fairs at mga aktibidades ng Department of Trade and Industry.
Allow me also to mention that one of our projects in the Department of Trade and Industry is Go Lokal!, it’s similar to a trade fair. It’s what we call a trade fair every day. That is with the help of private sector partners. Shangri-La, hopefully, will partner with us. That will showcase every day in the mall, the products of micro SMEs. We make them as a partner, and the mall will run the Go Lokal! store by themselves, but we will tie them up with the micro SMEs.
In that way, we push for the promotion of the micro SME products for free. In other words, they get to be exposed in mainstream, high foot traffic venues like malls, especially in Shangri-La. When you go to this area, napakaraming tao parati kapag weekend. Dahil malapit din po tayo rito, nagpa¬-patronize din po tayo ng Shangri-La, many times.
Masasabi ko ho na that particular project, that we hoped Shangri-La will partner with us, like other malls have partnered with us. It allows the malls to empower micro SMEs by having a venue to showcase their products.
Plus the normal challenge is that after we support the micro SMEs in terms of seminars, nabanggit ko po na yung Mentor ME kanina, that’s a free seminar given nationwide, after we’ve given financing, after we’ve given product development support, may produkto na, walang mapagbentahan.
I mean, they would participate in trade fairs, but these would only be for three to five days. Then it’s gone. So what we’ve done is an everyday trade fair. It’s a win-win partnership because the malls get to run it themselves, ang benta po sa kanila, ang tubo po sa kanila. But the magic there is they help micro SMEs get the necessary exposure. So yun, maganda po yung business model, hence we encourage Shangri-La to be a partner. We understand that you don’t operate stores yourselves, but let’s make arrangements na may operator that can help you manage that.
We give high priority sa mga activities like trade fairs and Go Lokal! stores because they bring good business to the micro SMEs. These are tools that help them elevate their status. Kapag na-discover na sila ng malaking buyer at umorder na ng malaki, ‘yan na. Umpisa na ng paglaki ng negosyo nila.
‘Yan din po ang sikreto na nangyayari every time we have a trade fair. The buyers like the product, o-order ng marami, ang next na: “Paano ako mag-eexpand?” sabi ng SME “O-order na agad ng ilang libong piraso. Naku, hindi ko kaya ‘yan.” But with the assistance of the Department of Trade and Industry, matutulungan natin sila to expand.
Of course there would be financing programs like P3, yung programa ni Presidente Duterte na Pondo sa Pagbabago at Pag-asenso, para mabura na talaga ang mga 5-6 and to give microfinancing options sa ating mga micro SMEs. Doon po, tinulungan tayo ni now Senator Bong Go.
And our President really wants to help the micro SMEs sa ilalim po ng ladder of entrepreneurship, ‘yung mga nagsisimula pa lang po ng kanilang business.
Example po, there’s a nice Bicol micro SME story. Na-meet ko po kanina si Ms. Emilyn Labor, siya po yung may-ari ng Jireh Food Products. Sila po ay OFW couple, kasama po ang asawa na si Mr. Roy na nagta-trabaho sa kanilang factory dahil nandito si Mrs. Emilyn.
Humingi po sila ng tulong sa Negosyo Center sa DTI-Camarines Norte Provincial Office. Nag-umpisa sila, kalian lang, November 2017. Nag-venture po sila sa vegetable chips, mga malunggay, tomato, carrot chips.
Iba pang mga Negosyo Center assistance, tinulungan sila sa product development, sa packaging, labelling, nakakuha po ng PHP30,000-worth of loans sa MicroVentures Philippines Financing Company, or ‘yung programa po nilang OnePuhunan. PHP100,000-worth of loans from BPI-Bangko. Nag-participate na sila sa maraming DTI-initiated trade fairs mula noong 2017 pa lang. In a short period of time, marami na silang napuntahang trade fair.
Naging participant na sila ng mga free seminars na Kapatid Mentor ME with the Go Negosyo Group, kung saan din po ako nanggaling bago ako sumali sa Duterte administration noong nagsimula ang termino ni President Duterte.
Ngayon tinutulungan po sila sa webpage development through a DTI-DICT partnership. Para kapag nasa website po siya, mas lalawak po ang kanyang merkado at mas madidiscover po siya. Any time, 24-7. Ang lahat po na yun ay binibigay na tulong, kaya ngayon ay nandito na siya sa OKB.
Siya po ay isa lamang sa maraming storya ng natulungan ng DTI at ng mga partners kagaya ng PhilExport. Sabi nga ni Ma’am, 43 years na sila. Is it your parents pa ho? Kayo talaga ng sumali. Usually ang anak ang nagmo-modernize at sumasali sa association.
We also have a partnership with the Department of Tourism to promote the places. Every time we have a common program with DOT, when they promote the places, we can also promote the products. Even abroad, sa mga commercial posts natin, we always partner with DOT. Even in our Pasalubong Centers, OTOP Philippines Hubs, we always partner with the DOT.
We’re very happy that we’re doing this OKB. Bicol is one of the fastest-growing regions in the country. Among 17 regions, it grew at 8.9% in 2018. Ang kanya pong per capita income, sharpest growth at 6.8%. Lumaki ko ang average income ng mga taga Bicol. ‘Yan ho ang mga economic numbers on Bicol.
And the DTI helped contribute to the Bicol region’s economic growth dahil po sa pagtulong sa micro SMEs. Micro SMEs are really the backbone of the economy. Practically all companies, or 99.6%, are micro SMEs. Only 0.4%, napakaliit, ang large enterprises. And they account for 70% of employment. They are a big help to the economy.
The challenge to us really is their contribution to the economy is not as high as 99.6%. The challenge is how to make micro SMEs high value-adding. The challenge is maximize the profit potential. Kapag mas ang value niyan, mas mataas ang mape-presyo niya, mas mataas ang kita ng ating mga micro SMEs. And that’s the type of operations ng micro SMEs na gusto nating maikalat. It’s really the value adding aspect.
Aside from sipag at tiyaga, for the same effort, mas malakit ang kita if you have better design, better packaging, it’s market-driven, it’s unique, it’s differentiated. Maraming tinitignan para maging value-added yun. Doon po sila mas nakaka-experience ng kaginhawahan.
I have also seen some products, I have tested it. There’s the pili products. I know the Vicky’s Pili is in our Go Lokal! stores. Nafe-feature na po sila. I hope lumaki ang negosyo niyo mula noong sumali kayo sa Go Lokal!
Raising smart entrepreneurs is really the passion of DTI. Marami pong activities natin, doon naka-sentro. How do we really empower micro SMEs? We always say, it’s so easy to start a business. But how to hold on to it, to grow it, is really the difficult part. At maraming hindi nagiging successful dyan. But with assistance from all partners, sigurado the probability to succeed will be much higher. That’s what we’re working for.
That’s why nationwide, we’d like to announce that there are about 1,070 Negosyo Centers. These are the centers that can help micro SMEs to empower, level up their business models. Help them in terms of registration, product design, seminars, mentoring, coaching tables. Yung maliliit nan a negosyo pumunta kayo sa Negosyo Center, may magco-coach sa inyo diyan on financing, legal papers, product dev, design, whatever you need in business.
Just in Bicol alone, we have 70 Negosyo Centers. Almost 10,000 MSMEs assisted just this year, January to May. Every day ho talaga may pumupunta sa mga Negosyo Centers.
We’d like to mention that the OKB goes beyond the annual marketing event for Bicol’s fine products and tourism potentials. Na-emphasize po ni Ms. Villanueva, the heritage and moving forward, modernizing the products needed in the market. Ma’am, I was listening intently to your speech. To demonstrate the Bicolano resilience and to demonstrate Bicol’s socio economic potentials in trade, industry, and tourism.
We’re happy that in this event, we’re just limited by the boundaries, so we were only able to accommodate 54 exhibitors. Kung na-expand pa, we could’ve brought in more than 100. But that’s fine. This is our beginning with the Shangri-La group. Maybe we have a Go Lokal!, we’ll help you find an operator.
With this, I’d just like to congratulate again yung grupo ng mga partners tumutulong sa DOT. Babanggitin ko na rin po ang DOST, ang DA, at syempre ho ang Office of the President na kasama ho natin sa pagpapalago ng mga micro SMEs. Ang gusto ng President, walang maiiwan. If we empower the bottom of the pyramid, we empower the nation.
Magandang hapon po sa inyong lahat.
Keynote Speech of Secretary Ramon M. Lopez, FFCCCII 32nd Biennal Convention
KEYNOTE SPEECH OF SECRETARY RAMON M. LOPEZ
FFCCCII 32nd BIENNIAL CONVENTION
22 March 2019, Marriott Hotel, Pasay City
[Greetings and acknowledgements]
Magandang gabi po sa ating mga kaibigan mula sa federation. You are the friends of the Department of Trade and Industry. Kayo po ang nagpapatakbo ng ekonomiya, ng ating bayan. Palakpakan po natin ang inyo pong mga pinaghihirapan at kasaganahan din sa pagnenegosyo dito sa Pilipinas. This is my third time to join you in your very important gathering. This is the 32nd Biennial Convention.
It is always a big honor and pleasure from the Department of Trade and Industry family to be with all our friends in the industry. We are your representative in government. The DTI is your representative in government. We are here to work for you. Kaya po kung meron kayong problema, ang bilin po ng ating Pangulo is to let us know so we can address and find solutions to your problems. I hope that we will be able to address all those problems you are facing. There are so many policy issues that we face each day. There are so many problems that we face each day. Lalo na po sa negosyo.
Relationship. In the administration of President Rodrigo Roa Duterte, this is a relationship that has become really beneficial, especially to all of us in trade and industry sector. China’s role has become very significant in our economy. Hindi po pwedeng maging mahina ang relationship natin sa China due to the Independent Foreign Policy of President Rodrigo Roa Duterte, we are able to strengthen further our respective relationships with our partners, especially those from China. Our two Presidents, PRRD and President Xi Jin Ping, in fact has met, has undertaken about six bilateral meetings already. That’s how close our two presidents are. There’s a series of meetings every time we are in China for the Presidential Visit or State Visit. The visit of President Xi Jin Ping in Manila, the Belt & Road Forum, our participation at the China International Import Export Expo and soon, there will be another presence of our President at the Belt & Road Forum this April 2019. And of course we recognize also the efforts of all our other officials who are having their own participation in gathering and meeting Chinese counterparts like incoming trade mission from China this March. And there will be another Boao Forum that will be led by Speaker Former President GMA. This will be followed immediately by the Belt & Road initiative Forum.
Of course China, from former number two top trading partner has become number one in the past two years. Number one if we combine both the import and export. China is our 4th largest export market and number one import source.
China’s strong commitment to support the Philippines is a proof of confidence in President Duterte’s administration. Just recently, we are able to approve several major industrial projects. For example, last December we welcome the entry or the registration of Hebei, the one of the biggest iron and steel company in China and partnering possibly with Steel Asia here in the Philippines to produce the first ever integrated iron and steel operation in the country, with no government support. That’s a good indication that our partners from China are coming in. Pulangi Hydroelectric power plant in Pulangi in Bukidnon was also approved last September. This is a hydroelectric power plant/ There are other major infrastructure projects. The much talked about Kaliwa dam, a very important project supported by our friends in China. There are also grants given to us. The two bridges along Pasig river, one in Binondo area and one in Rockwell Estrella. These are from China grants. Of course there’s the third telco player, Mislatel, China Fortune Land Development for a 200-ha industrial park in Batangas. These are just a few of the many projects that we are facing and we are accepting right now.
It is the good time to do business. I’m sure kayo po, you are experiencing a good growth in your respective businesses. Tama po ba? Is everybody happy with the way our economy is growing?
Past 80 quarters, the economy has positive growth rate. Fifteen consecutive quarters, over 6% growth rate. Many countries are envying what we are achieving right now. And the very good part of this growth rate is that the sources of the growth are not the usual. On the demand side, you look at usually Consumption, Investment, Government, of course export minus import. But on the domestic side, we are getting to experience a very strong domestic demand. Before, our country used to depend only on Consumption. That’s good also, it’s not bad. But this time, it’s not only Consumption. Gross Domestic Capital Formation or Investment Capital Formation is one of the main source right now plus Government spending because of the Build Build Build infrastructure spending. Now, double digit growth over 10 %. So domestic demand are all double digit compared to the single digit in the previous administration.
On the Production side, so these will be on the Agri, Industry, and Services, our economy usually depend only on Services, over 6% growth, 6%-8% range. Now, Industry is also experiencing 6%-8% growth. Part of Industry—manufacturing and construction. Manufacturing is at 6%-7% growth. You know construction, it’s double digit, 15.8% growth. Before, one quarter, our country will only have about 28,000 construction projects, not only government, private as well. Twenty eight thousand in one quarter. Now, its over 40,000 projects in one quarter. So, ang daming negosyo. Ang daming perang umiikot. Hindi ba kayo masaya doon? Maraming construction projects, maraming negosyong umiikot and more.
As a result, of course there is more employment. There are 826,000 jobs recorded last year, in 2018. That brought down the unemployment rate to 5.3%. That used to be in about 6.6% in the previous years. But in January, it even went down to 5.2%. So, with the young population, 24 years old average age and growing population by 1.7% every year, we are about 107 million in population. That will be your market. Much larger consumer market. Alam ko maganda rin sa negosyo yun. Because of that, so much investments being attracted to enjoy the growing domestic consumer base. So its creating also a positive cycle – more investments, more jobs, more income, growing middle income – that is the reason why there a lot of people eating out.
Just a few days ago, we launched the coffee retail concept, KAPEtirya in Baguio. We want to mainstream our very delicious Philippine-made coffee. So it will be a franchiseable concept soon. Why are we doing that? Right now, we are enjoying instant coffee. You know, 3-in-1, 2-in1 coffee. But there’s a growing market of those eating out, preferring cafés. So there’s a growing number also of coffee shops. And we are riding on that growth. The Department of Trade and Industry is basically starting a project that brand a café that will be government-owned but private sector-run and private sector investment. It will be a franchiseable concept wherein a franchisee or private sector will be the one to operate and borrow the brand of KAPEtirya and operate it nationwide. Hopefully we will have more than 1000 branches nationwide. We invite all of you to invest on it once we roll out the franchiseable concept. This is just one example of how bullish we are on a much stronger economy and growing middle class society.
The much talked about inflation problem last year was just much talked about. Wala talagang problemang madali. It’s just a 5.2 average inflation rate. It’s not even a double digit inflation rate experienced in other countries. Remember, several decades ago, we experienced double digit inflation rate but however it was talked about issue last year. It’s fine. It kept us in our toes. But that was just a 5.2. Take note, 5.2 percent.
Last January, it went down already to 4.4%, then February, 3.8%. So, we expect that to be in the area of 3%. Again, good for business.
A lot of reforms are being made, Rice Tariffication to help solve again inflation and supply issues. So many more reforms are being done to encourage more businesses, level the playing field, remove the unfair trade practices, and open up the economy without neglecting the support to the sector. The proceeds of the tariff rate to be collected, the 35% tariff on rice, will be brought back to the agriculture sector, to the farmers. This time helping farmers because it is still over 95% locally produce, so we have to make sure that the 95% local producers, farmers, producers of rice will be improve competitiveness and productivity, that will make them more profitable, more prosperity for the rice farmers. A lot of support will be given to them that will make them more competitive and hopefully become global producers of rice in the future.
DTI is working to sustain this momentum by working on several fields. Our priority is Trabaho, Negosyo, at Konsyumer protection. You can summarize it in those areas. We want to create jobs that why we push for more investments. Our investments last year hit a record-level of Php 915 billion. That’s 48% higher compared to the previous year of Php 617 billion. Remember that the Php 617 billion in 2017 was already a record-level for the past 50 years of the Board of Investment. Fifty-year history ha. Record-level na nung 2017, na-surpass pa ng 2018. So again, an indication of strong confidence to President Duterte. We create trabaho or jobs from investments. And as investors come in, it also creates negosyo or business opportunities. Businesses that will surround the manufacturing activities or the investments that are coming in. Supporting the creation of foreign investments, creation of jobs, we want to make sure that there’s a market for our products.
We enjoy right now the Generalized System of Preferences or what we hear as GSP. The GSP privilege in the US is about 3,500 products enter the US market with zero duty so we can encourage exports to the US. Also in EU, we enjoy the GSP+, 6,274 items are also entering the EU market with zero duty. So what we are trying to do now is encourage investors even from China, given the US – China trade war, for them to locate to the Philippines. Because if they manufacture in China and send it to Europe, their tariff rates will be higher. But if they locate in the Philippines, manufacture here, sell to EU, they’ll have zero duty. So that’s a huge advantage. I hope some of your are also enjoying these. Your manufacturing are also selling to EU.
Other reforms we’re doing include the Ease of Doing Business. Our President signed the Ease of Doing Business last year. The IRR was completed on October 22 and the law is already in effect. In other words, if you are experiencing difficulty in transacting with government, application in the Executive branch, should not be more than 20 days. So for simple transaction, it should be 3 days, 7 days for complex transaction, and 20 days for highly technical. It’s a very harsh law and implements a two-strike policy. But first you should complain. First strike, suspension. Second strike, termination at kulong pa. Bawal na rin pong magbenta ng fire extinguisher. You can buy your own or have your own fire extinguishers without the need to buy it from the authorities.
At the DTI, we also try to protect the micro, small, and medium enterprises. (MSMEs). We want to make sure that our MSMEs are supported. First, in fact, we have the 7Ms. They have to learn from our Filipino-Chinese brothers on how to do business. That’s why we want to teach them the proper Mindset, conduct Mentoring. We thank all our partners in helping us mentor all our MSMEs. I hope we can have more of you as mentors. We have almost 1,049 Negosyo Centers.nationwide. I understand that there are a lot of chambers from different provinces. We encourage you to just allot event two hours a week. You or your technical people who are good in accounting, product development, HR, legal, etc, all these functional requirement for businesses to help our MSMEs to prosper. Or you may include them in your value chain. Make them as suppliers. Sa kanila tayo bumili. So you can allow them to grow and they will have markets for their products. These are huge assistance and help to the country in nation-building. If you can try to help us in those areas: mentoring and teaching, enabling, and empowering our MSMEs. Our President really want to elevate and uplift the lives of those at the bottom of the pyramid. Because if you uplift them, actually you are creating more prosperity and widening the reach where everyone will be prosperous.
Try to help them in microfinancing. We have launched a microfinancing program where there’s no collateral needed, aiming to stop the usurious 5-6 loans. You can also be our partners and become Credit Delivery Partners and help us spread the availability of this microfinancing loans.
A lot of opportunities are created for our MSME brothers and sisters. We are teaching them how to fish not just giving them donation.
There are a lot of programs, like promoting our products abroad. The Philippines, DTI is participating in the Dubai Expo to give better visibility to many of our businesses and products. We also joined the China International Import Expo, which part of China’s efforts in opening up their market, welcoming more suppliers for their country. We also trying to support all the SMEs who are participating.
As our support to our MSMEs, we hope more retailers can open up for their products. Try also to give them cash payments so they’ll have a working capital.
I would like to thank all of you for listening. DTI is your partner in your businesses. Thank you for being a partner in nation-building.
Maraming salamat po.
Keynote Message of Secretary Ramon M. Lopez, PhilConstruct Luzon 2019
KEYNOTE MESSAGE OF SECRETARY RAMON M. LOPEZ
PHILCONSTRUCT LUZON 2019
28 March 2019, ASEAN Convention Center, Clark Pampanga
It was really a challenging task to finish immediately, in just three months, yung atin pong i-la-launch mamaya, the Construction Industry Roadmap. Napakabilis. I think they just started sometime November, and now, we are launching it today. And on a very good timing. We’re launching it on the birthday of our President Rodrigo Roa Duterte. Palakpakan po natin. Unang-una ang ating Pangulo, for being really a selfless, most sincere leader of a country, who is dedicating his life in performing his duties and responsibilities. Kaya ho, let’s give him a warm warm of applause for his 74th birthday.
Ang atin pong i-la-launch na Construction Industry Roadmap, palakpakan din natin. Napakaimportante rin po ng roadmap. That roadmap really stresses out the vision for the industry. This is the vision that we are all in agreement and definitely we are pushing for. The vision that will protect excellent sustainable, productive, and an industry that should be requiring and adopting a culture of integrity. So ‘yun po ang, these are all the characters and values that are being shared in this industry roadmap.
It is a roadmap that will allow us to ride with the growth that the economy is having, the growth that is really unparalleled, 6.2%. And you know what, construction is 15.8% growth in the last quarter. Palakpakan po natin ang construction industry. It is the one pulling up the economy, frankly. If you look at the GDP figures, before we used to be led by Services, all these 6%-7%. Now, the industry is led by two things: manufacturing and construction.
Manufacturing is also helpful. It is also growing to 6%-7%. That is a sustainable growth that is also providing stable and decent jobs for our countrymen. Bawat trabaho na nagagawa natin, could really pull one family out of poverty. That’s for each job that we created. It’s really important that we have manufacturing growing 6%-8%.
Now, construction growing 15.8%, alam naman natin dati single digit lang po yan. Now, everywhere we go, before the average in a quarter was 28,000 construction jobs. Ngayon, in one quarter, we’re reaching 48,000 construction jobs. That’s really good development for the industry.
We support the Build Build Build, the massive infrastructure program.
Before, our economy was led by Consumption growth. Now, it’s being led by Investment and Government spending. Partly because of the Build Build Build program. The Government spending, it is really on investing for the future that creates more infrastructure projects. In the end, bababa ang ating mga logistics cost. It is really for business and greater growth for our industry and agriculture, as we go along the logistics cost. And with the Build Build Build, we look forward to lowering the logistics cost and creating more of those growth centers. One of the fastest growing centers nowadays is here. Hindi pa ba kayo nag-invest ng mga lupa dito? Kaya invest, invest invest here in Clark, here in Central Luzon, the future Smart City in the country.
So, again I would just like to congratulate the sector, the stakeholders who contributed in the industry roadmap, which promotes excellence and make our services globally competitive, allowing us to export these services and really making known that the Philippines really provide globally competitive services, promoting excellence, integrity, sustainability, and productivity.
Good morning po sa inyong lahat!
Keynote Address of Secretary Ramon M. Lopez, Franchise Asia Philippines 2019 International Conference
KEYNOTE ADDRESS OF SECRETARY RAMON M. LOPEZ
FRANCHISE ASIA PHILIPPINES 2019 INTERNATIONAL CONFERENCE
27 March 2019, World Trade Center, Pasay City
Good afternoon everyone. I’d like to greet, of course, my seatmate, Secretary Berna. Mag-seatmate kami, pero hindi kami nagkokopyahan.
The other seatmate, actually, is Secretary Art Tugade. We happen to be all together last week in the investment roadshow in Tokyo.
Of course, ang mga mahal ko pong kaibigan at partners sa Philippine Franchise Association, led by Chair Emeritus, Mr. Samie Lim. Ms. Bing Sibal-Limjoco, is also sa PCCI President and Vice Chair. Mr. Rihard Sanz, PFA President. Dr. Alan Escalona, PFA Chair.
The PFA Board of Trustees and Officers. Of course we have here, Sherill, lahat ito mga partners and mentors in the entrepreneurship advocacy in the last 14 years already. Ms. Sherill Quintana, Ms. Yvette, Mr. Dominic, Jo Magsaysay, Vic Paterno, Mr. Fred, Rebecca, Chris, another special friend who’s hiding at the back, Richie Cuna. And of course, special mention to our long-time partner, the SM Group, led by Ms. Tessy Sy-Coson, a partner in many DTI programs, I must say.
And all the partners and supporting organizations of this event, the international delegates, and participants, good afternoon once again.
To the partners and friends at the Philippine Franchising Association (PFA), thank you for inviting me to speak in today’s Franchise Asia Philippines (FAPHL). I think I haven’t missed any Franchise Asia Conference for the past three years. And I’ve made several presentations already of the DTI programs. It’s always a pleasure to see, this time, the next generation of franchisees and franchisors.
I also want to recognize the significant role of the members of PFA in generating inclusive economic growth in the country. As you know, inclusive economic growth is the primary concern and goal of our president, President Duterte. Whether it’s doing well in business or teaching aspiring entrepreneurs how to do well, PFA has always been supportive of the work that we do at the Department of Trade and Industry (DTI). For that, I sincerely thank you.
I hope that PFA and all the entrepreneurs here continue to participate in the country’s economic growth story. Because if there’s one key takeaway that you should learn from my talk, it’s this: IT’S A GOOD TIME TO DO BUSINESS IN THE PHILIPPINES TODAY.
PH GROWTH STORY
Last year, the Philippine economy was a bright spot in Asia and was the second fastest economy in ASEAN. Our GDP growth was at 6.2%, this is really a continuous 80 quarters of positive growth rate, and 50 straight quarters of growth rates above 6%. With our relatively fast GDP growth, this means the Philippines is gaining more economic opportunities, from attracting investments to creating jobs, generating more income, and enlarging the consumer base.
With this development, we also see a fast-growing middle class sector in the economy. And I’m sure all of your franchisors and franchisees are experiencing this growth. One statistic also tells us that the eating out habit has posted a faster growth rate, faster than the GDP growth. So they are nearing 10% growth rate.
Speaking of investments that translate to more jobs, I’d like to mention that the Philippines hit record-breaking levels again. For 2018, our investment approvals hit Php915B, an increase by 48% year-on-year. At that time, that was already a record-breaking achievement in the 50-year history of the BOI—the 617B approved investments in 2017. .
These investment approvals signify two crucial facts. One is that investor confidence in the Duterte’s administration is quite high thanks to the economy’s strong performance. Second is that more investments mean more jobs for our countrymen.
The good thing about this is that the development is not only anchored in one sector, but on more sectors of the economy. If you look at the expenditures side, what’s bringing up the growth is consumption spending. And we would normally grow at 5-6%. But now we see investments, gross national capital formation performing a high single digit and government spending going into investments, into the Build Build Build, also performing a double digit growth close to 16%.
On the production side, we have agriculture, industry, and services. We used to rely only on services. And services would only grow at around 6-7%. The good thing is that we are maintaining that growth. But now the manufacturing sector, which used to be performing with a 3% growth, is now performing at over 5 to 6% growth.
In the industry, it’s also manufacturing and construction. If you look at the construction industry, we have a 15.8% growth, this is already a result of the Build Build Build project, which is an aggressive infrastructure development program of the Duterte administration.
Stronger domestic demand means stronger consumption and more money being spent. For this, we can also credit the tax reform 1 that resulted into lower tax rates for many people. This helps to enrich our consumer base, which means there’s more money floating into the system, higher disposable income for more Filipinos. Meanwhile, our tax reforms also help to attract even more investments. Especially, as we begin to consider the second tax reform. That is now pending in the Senate.
Likewise, our unemployment rate is at the lowest in nearly 40 years. It’s down to 5.2%, that unemployment rate used to be at the 6.6% level. So again, more employed, lesser unemployed. And we hope, like last year, it was reported that we generated 826,000 new jobs, which means more of our people now have jobs—and the money to spend.What we are seeing now is a virtuous cycle for our economy.
The consumer confidence has also gone up. This is also assisted by the lowering of the inflation rate. Last year, we talked about a lot regarding inflation—but you know, it’s only a 5.2 % inflation. It’s not that high considering the double digit inflation rates in previous administrations or in other countries. That 5.2% full year average has gone down to 4.4% in January and 3.8% in February. And we see this settling at a level of 3%. And frankly, personally, I see this going a little lower than 3%.
All these factors are good for business as the government continues to institute more economic stimulators that would create more prosperous Filipinos. Thus, we’re not surprised that an HSBC report last year declared that the Philippines is expected to become the 14th largest economy in the world by 2040.
TIME TO DO BUSINESS
A growing economy is the best time to do business. As the saying goes, "A rising tide lifts all boats." This means that everyone benefits when the general economy rises—and continues to improve.
That’s why DTI is committed to creating more businesses by pushing the development of Micro, Small, and Medium Enterprises (MSMEs). And I always say this, even when we are in Tokyo, how I love tourism to really grow.
Because in tourism, we really see a lot of Micro SMEs in that sector. From the transportation sector that will carry the tourists from the plane to resorts. The resorts themselves, the bed and breakfasts, the restaurants, the food suppliers to the restaurants, the gifts and souvenirs industry. So many Micro SMEs in that particular. So we are all out, 200%, behind tourism development. And we are actually creating more and synergies with the DOT, with respect to promoting our country. We promote the products and services, and of course they promote tourism.
By creating inclusive economic growth through MSME development, we not only empower our countrymen to uplift themselves but also reduce poverty. In 2018, we posted a huge growth in registered enterprises. What used to be 900,000 in registered enterprises, we have gone to up 1.3 million registered enterprises. And we see this to be continuously growing.
To this end, DTI created the 7Ms Framework of Successful Entrepreneurship that helps promote entrepreneurship as well as create smarter entrepreneurs. The 7Ms are: Mindset, Mastery, Mentoring, Money, Machine, Markets, and Models of Negosyo—of which one is Franchising.
FRANCHISING & ITS BENEFITS
DTI FIRMLY BELIEVES IN FRANCHISING AS A MODEL OF NEGOSYO. The wonderful thing about Franchising is that you can do it in two ways. One is that you can become a franchisee; or you push your business to the next level of its growth cycle to become a franchise.
As a franchisee, the learning curve is not as high as it teaches aspiring entrepreneurs tried and tested business concepts. Because of this, Franchising has a 90% success rate as compared to 25% for traditional retail and businesses. Franchising also acts as an enabler as it gives entrepreneurs a chance to upgrade their business into becoming a franchise. And I urge the PFA members to make use of the 1,049 Negosyo Centers as your tool or venue to offer franchising as models of businesses.
Aside from Models of Negosyo, Franchising uses extensively from Mentoring as entrepreneurs learn the important elements of business. You’re never alone when you go into Franchising because you’re always learning from those who have business experience.
That’s why I’d like to thank PFA for being one of our pillars of support in our Mentoring Programs in the DTI Negosyo Centers. They are the ones who mentor our entrepreneurs on how to set up and grow their business, as well as promote Franchising as a successful business model.
THE KAPETIRYA CASE
I’d like to point out our recent program that is, in a way, franchising a government concept. We’ve launched last week our KAPEtirya, which would help our coffee farmers by raising awareness of and mainstreaming local coffee.
Presently, the Philippines is the 5th top coffee-consuming country. However, 80% of our coffee is imported. There’s a need to encourage more coffee producers. Moreover, while our country is part of the coffee belt and our land is 100% suitable for coffee production—would you believe, we are the top importer of coffee worldwide.
That’s why we opened the first KAPEtirya coffee shop in Baguio last week. Focusing on selling only Philippines coffee products, this coffee shop will be a collaboration between the public and private sector. That is, while DTI owns the KAPEtirya brand, the shop is run by a private sector partner. And soon, we shall develop a manual of operations that will make this product franchiseable. And we hope to have more than 500 stores or kiosks nationwide.
Moving forward, we envision KAPEtirya shops serving local coffee products to over 500 stores nationwide. This would not only create more demand for Philippine coffee, it would create an impetus for local coffee farmers to plant more so that they can address this market.
This is not the first time that DTI has done a franchising concept. Aside from KAPEtirya, Go Lokal is DTI’s way to mainstream top quality local products from our MSMEs that haven’t gone mainstream yet in high-foot traffic areas like malls. We believe that the private sector is the engine of growth and they should really be the ones operating businesses. Government will be introducing concepts and business models that will be run by the private sector, to make the operation really sustainable.
While both KAPEtirya and Go Lokal are franchises, DTI isn’t doing this for the money but rather focuses on concept development for a more inclusive economic growth and development. In the case of KAPEtirya, our goal is to make local coffee mainstream even as our private sector partner makes the operation of the coffee shop profitable for themselves.
To conclude, I’d like to part with a quote from the inventor Thomas Edison, who said: "I didn't fail 1,000 times. The light bulb was an invention with 1,000 steps." This is something that any successful businessman understands: there is no overnight success, and that any success is the result of hard work. But it’s also good to remember that with Franchising, it’s easy to replicate success.
As our country continues its growth story, I am confident that the businesses you create today will help sustain this growth. My hope is that this will help the Philippines sustain the recognition as the “Franchise Hub of Asia,” as well as a more inclusive and prosperous nation.
Thank you and mabuhay tayong lahat.
Speech of Secretary Ramon M. Lopez, Kapetirya Launch
SPEECH OF SECRETARY RAMON M. LOPEZ
AT THE KAPETIRYA LAUNCH
March 20, 2019, Crafts and Productivity Center, Baguio City
Magandang umaga ho sa inyong lahat. Good morning Baguio. Allow me to join the previous speakers in really thanking, ito po from the heart, our partners from the local government led here by no other than the honorable Mayor Mauricio Domogan. Maraming salamat po, Mayor. At ang ating nangungunang Councilor, Mike Lawana.
Naikwento po kasi nila the way nasuportahan niyo po ang mga proyekto ng DTI lalo na po ito hong paligid natin na OTOP at Kapetirya. Ito ho ay lugar ninyo na pinagkagastusan niyo pa para sa DTI. Alam niyo hong walang budget ang DTI, kaya’t maraming salamat ho sa local government led by Mayor Domogan.
Syempre sa ating DTI Family, led here, next to me po si Asec. Bles at ang reyna ho ng kape, coffee queen na tinatawag, si RD Myrna Pablo--isa hong napaka-passionate na head ng coffee industry cluster nationwide. Hindi lang sa CAR.
Of course to the CAR family of DTI, NEDA, and TESDA. Private sector partners, na hindi naman mao-operate ito kung wala sila. Ang nag-volunteer po na mag-operate nito ay sina Mr. Ervine Pangwi and family, Marikit also. It’s a family affair. Sila po ang mag-ooperate, pro bono.
Kasama po ng ating mga mentor na pro abono. Abono sila paakyat, abono pababa. Sa lahat po ng pa-meetings, Coke Zero lang ho ang katapat. Sa susunod ho, kape na ang katapat. Sila Dean Pax Lapid, the bestselling author ng maraming entrepreneurship books. Professor sa AIM, naging dean sa maraming eskwelahan, lalo na ‘yung Entrepreneurship School of Asia.
Ang dean na rin ang tawag namin, Dean George, for starting many projects, Potato Corner, kasama po siya, ‘yung worldwide na ngayon. At ‘yung sikat na sikat ngayon na Tokyo Tempura at marami pang new concepts. Actually ‘yung idea galing kay Jenny, ‘yung asawa. Sila ho, the dynamic duo, the couple that’s really working hand in hand.
Salamat sa inyo, George, Dean Pax, and Jen, ang lahat ng ito ginagawa ninyo para sa bayan. Hindi lang naman po para sa DTI. Although kayo po ay mentors ng DTI at ibang organisasyon din. We’ve been really helping a lot of organizations as part of our passion to help the Micro, Small, and Medium Entrepreneurs. Ang ambisyon ho natin dito, ‘yung mga maliliit lumaki. ‘Yung micro maging small, ‘yung small maging medium, at kalaunan, sila na ang maging large. Ito po ang vision natin sa project na Kapetirya. Para rin pong OTOP na katabi.
Wala ho kaming ibang objective kundi tulungan ang maliliit na negosyante, mga maliliit na magsasaka. ‘Yan din po ang vision ng ating Pangulo. Ang Pangulong Duterte, napakalambot ng puso sa mga bottom of the pyramid na tinatawag. Sila ‘yung mga mahihirap, maliliit, nahihirapan na sa kanilang buhay. To live a comfortable life. Ang to help them live a comfortable life, kailangan silang alalayan sa kanilang mga gawain.
Kaya nga ho, kahit sa Ease of Doing Business, napakadali, hindi na sila pipila, mag-aantay. Kapartner po ang mga LGUs d’yan. At sa pagnenegosyo, hindi na mahihirapan kumuha ng permit. Marami ho tayong ginawang reforms d’yan. At kasama na sa pagtulong sa kanila ‘yung kabuhayan mismo.
Ito hong konsepto ay hindi lang para i-promote ang Philippine brand of coffee na sikat na sikat ngayon. Marami hong nananalo sa cupping competition galing sa different parts of the country at nangunguna na ho doon ang CAR dahil ‘yung huling nanalo sa cupping competition ay galing dito. ‘Yung Ato coffee. Marami tayong magagandang brand. Kailangan lang ho ma-shocase sila, maipakilala sa buong mundo.
Ang layunin natin ngayon ay maipakilala ang Philippine coffee at kapag naipakilala at dumami ang Philippine coffee outlets, ang mga farmers na nagsu-supply, matutulungan. So in effect, ang ginagawa ho natin dito ay pinaparami ang market access o market outlet ang mga gawain ng mga magsasaka natin. This amounts to alleviating poverty, lalo na ho sa farming sector. Kaya’t ang partner po namin ay DA. Napakaimportante po ng pinirmahan namin si Secretary Manny PInol na tungkol dito sa coffee. From production, ibig sabihin farmers, to the use of coffee processing and marketing of Philippine coffee brands.
Alam niyo po ba, sa Pilipinas, we are the number one importing country of coffee. Nagulat din ako doon. Ang daming malalaking bansa, pero number one mag-import ang Pilipinas. Sa pag-consume, tayo ‘yung number five. Pero hindi tayo number one sa pag-produce. Mas marami tayong iniimport, ibig sabihin, mahina pa ‘yung production natin. We had to imoprt. ‘Yung iba, number one sa consumption ng coffee, pero hindi number one sa importation, ibig sabihin may production sila. ‘yun po ‘yun. Just looking at those basic numbers, mahalaga na mapalaki natin ang production natin ng coffee. Malaki ho ‘yung inaasahan naming partnership with DA sa pagtulong sa coffee farmers dahil kailangan may production tayo.
Kapag napalakas na natin ang demand sa mga outlet na to, at ng mga SME processors, makukumbinsi na natin ‘yung mga manufacturers tulad ng Nescafe, URC na yung demand nila manggaling na lang sa Pilipinas. Huwag na iimport. ‘Yung import na ‘yun--mga 80 to 90 percent ng coffee consumption ay ang instant coffee. Kaunti lang ‘yung mga tindahan na ganito. ‘Yung mga ganito, pang may kaya na, noh?
Just to show you the point, ‘yung instant coffee, nakikita natin, may 3-in1, 5-in-1, may 7-in-1 pa. Instant coffee is really the number one consumer coffee. But as the economy levels up, tumataas ang per capita natin, dumadami ang middle class. Nasasanay na ‘yung mga tao na kumakain sa labas, medyo sa pa-sosyal sosyal, nagbabasa d’yan, meeting meeting. So nagiging lifestyle na ho. Dumami na ‘yung ating mga coffee shops. Doon sa data na nakita ko, over 16,000 or 17,000.
At hindi tayo nag-iisa, marami tayong kumpetisyon. But the market is so big and the trend is towards eating out. Of coffee-ing out. So this is the way to go, nasa tamang trend tayo. And we have so many plans dito sa Kapetirya. At simula pa lang ito. Maraming salamat po sa local government ng Baguio, dito nag-buena mano ang Kapetirya, ang first retail coffee concept na atin pong ikakalat sa buong bansa.
Ito po ay nagsimula rin dahil ang konsepto ng Kapetirya, eh hindi naman ako ang nag-imbento niyan. Nagsimula ho ‘yan way back, maybe 6 years ago. Pero nakkita ko po laging ang Kapetirya sa mga trade fair. Tapos nawawala. Tapos kapag may trade fair, nandiyan na nanaman. Tapos nawawala na naman.
Sabi ko ho, ang ganda ng opportunity to use Kapetirya to promote Philippine coffee para sa ating mga magsasaka. So dapat hindi siya pang trade fair lang. Dapat ma-mainstream, makikita mo everywhere. ‘Yun po ang vision natin dito.
Kapag na-perfect po natin ang business model na ito. Ang intention po natin ay i-franchise ito. Kaya nandiyan po ang tatlong mentors na expert sa franchising. Kaya sila po ang tumutulong dito. Dahil sila ho, marami nang na-develop na franchise. Kapag ito ho, na-franchise natin, imagine ‘yung paglago nito. Hopefully, dadami ito, mga 300 to 500 branches. Or 1,000. Basta kapag kiosk concept, mas madaling padamihin. Padadamihin ito. Maraming maliliit, matutulungan pa, more SMEs, ‘yung mga gustong mag-negosyo pero wala pang naisip na negosyo. Pwede nilang gamitin ‘yung franchise concept as negosyo. Pwede nilang gamitin ‘yung Kapetirya concept that we have. It’s a government-owned brand, it’s not a private sector-owned brand, but the expansion will be private sector-led.
This is where we see a public private partnership. ‘Yun po talaga ang elemento na napaka-importante. And this is a tried and tested concept. Kung alam niyo po ang Go Lokal! Na nsa mall ngayon, in fact over all City Malls, in SM, ang unang nag-adapt Robison’s, Rustan’s.
Go Lokal! Is a concept. It’s a DTI-owned brand. ‘Yung SME nagsu-supply, at ‘yung private sector nagbibigay ng free space. Libre! Bakit libre? Dahil sila naman ang binigyan natin ng negosyo na ‘yun. You run the business but you carry our brand. In doing that, it’s a symbiotic relationship. Win-win. Natutulungan sila at natutulungan din ang gobyerno. So dito po, ‘yun din ang gagawin natin. Hopefully 1,000 branches.
Kapag naging matagumpay ang ating local coffee, imagine sa lahat ng offices ng government agencies, sa Baguio City Hall din, sa Burnham, sa lahat ng tourist areas. Lahat ng condominiums sa bansa, sa ground floor, sa lahat ng gustong mag-kape, tayuan na natin ng kiosk ng Kapetirya. ‘Yan po ang ating ambisyon. Kaya God-willing, dahil binasbasan po tayo ngayong araw na ito, sana mabasbasan rin ang ating objective na gawin ito nationwide.
Let me just end by thanking our partners, lahat po kayo dito. At syempre ang ating buena mano na locator, ang city government ng Baguio, Mayor Domogan, maraming maraming salamat po sa inyong lahat.
Speech of Secretary Ramon M. Lopez, National Food Fair 2019
SPEECH OF SECRETARY RAMON M. LOPEZ
NATIONAL FOOD FAIR 2019
March 14, SM Megamall
Magandang hapon sa inyong lahat. Salamat, Datu Gani. Sa mahal naming mga kasamahan sa Department of Trade and Industry, sa mga Undersecretaries, Assistant Secretaries, mga Directors, mga partners mula sa private sector, sa inyo pong lahat, magandang hapon po.
Welcome again to an empowering event, activity by the DTI. ‘Yung ganito pong mga food fairs at exhibits are meant really to empower MSMEs. Hindi po ito para sa amin, hindi ito para sa DTI. Ito ay para talaga sa ating mga kababayan na maliliit na negosyante. Ngayon ay naka-focus tayo sa food. Ang mga Pilipino, mahilig kumain, ang daming pagkain. Just walking round, isang ikot pa lang, napakaraming pagkain, nakakabusog na, amoy pa lang.
PACKAGING AND INNOVATION
Makikita ho natin ‘yung improvement. Inoobserbahan po natin ang packaging. We are always after better presentation, better packaging. We believe na kahit wala na tayo doon, it’s the product, the packaging that shouting out in the shelves para papansinin siya. Siya ang advertisement right on the spot. Ang ating mga SMEs are really knowledgeable, they have the desire to improve their packaging.
We’re also observing, yung mga bagong innovations, yung may technology. The DTI is here to develop enterprising Filipinos or entrepreneurs. But these should not just be entrepreneurs; they have to be full of innovation and creativity. Hindi paulit-ulit. We are always looking for something new para ho ‘yung ating mga consumers, ma-excite. Napapabili. Kapag bumili, nasusubukan. Maganda ‘yung concept. So I’d like to thank Director Mavoc at mga officers ng DTI at mga partners natin.
I think for the first time po ako nakakita na may concept tayo about cuisines. This is in partnership also with the Department of Tourism, with Secretary Berna Romulo Puyat. Gusto nating ma-promote at makilala ang Pilipinas hindi lang sa produkto, pati sa cuisines. For the first time, meron po tayong Luzon, Mindanao, at Visayas kitchen at may dining table sa tabi.
We’d also like to thank our partner chefs, sina Chef Anton, Chef Anna, at Chef Gabby. It’s not just an ordinary trade fair of products, we are also presenting the cuisine. Internationally, we have a program to bring in cuisines ng Pilipinas. Anong number one kapag abroad? Adobo. Ano pang susunod? Sinigang. Alright, nagugutom na tayo. Tapos lahat pa ng klase ng kakanin. Ayan po ang magiging focus ng ating next support sa ating mga cuisines para makilala na.
It has to be supported at kailangan systematic ang support. Kaya dumami yung mga imported dito na restaurants. Japanese, Chinese—matagal na ito. Pero Japanese, hindi naman tayo kumakain ng sushi dati. Pero ngayon nagustuhan siya. May Thai food. May Vietnamese recently. Korean pa ngayon. Unti-unti naiintroduce sila, with the support of their governments. It’s high time that we’ll also have a supporting program for entrepreneurs who will bring our cuisines abroad. But it will have to a standardized set of menus and cuisines. Hindi pwedeng iba-iba ‘yung adobo, dapat mag-aagree tayo.
We should also have better presentation. Because I know the chefs would know this. The way we do it, sa atin masarap, pero ang observation, ang masarap sa atin, others find it oily. ‘Yung kare-kare mo na umaapaw yung mantika sa taas. Sa abroad, we have to adapt also. So there are these things that we have to change para maging mainstream.
Kasi ngayon yung mga cuisines natin, kapag dinala mo abroad, nasa oriental stores or Filipino restaurants lang. Ang mga customers, Filipinos. Ang gusto natin, mainstream. Ang mainstream, ‘yung mga locals sa bansa na ‘yun will also like it. We’ll have that campaign with Tourism, and the DFA to promote the cuisines. Kaya may ini-introduce po tayo na concept on cuisines.
Another concept that’s introduced to today is ‘yung Halal ni Usec. Datu Gani Macatoman. Siya po ang ating Halal king sa DTI. Kaya ko nasabi ‘yun, Halal is under-tapped. Hindi po masyadong nagagamit ng Pilipinas. Alam niyo ho, worldwide, estimated 3.2 trillion dollars ang market. Ang Pilipinas, ni wala pang 1% ang nasu-supply niyan.
Even in the Philippines, hindi siya gaanong sikat. Now it’s gaining awareness. Bakit? Kasi naco-connect siya sa religion. Sa ibang bansa, even in Singapore, kapitbahay natin. Ten percent lang ang Muslim doon. The 90% karamihan Buddhist. And yet, they are mainstreaming, ibig sabihin ginagawang available ‘yan. Meron silang grocery store na puro Halal ang available doon. Not only for Singaporeans but for the tourists who visit Singapore.
Sa Pilipinas, marami rin tayong turista, nasa 7 or 8 million. Pero mas dadami pa ‘yun kasi ang Muslim tourists, hindi pumupunta dito. Hindi sila pumupunta masyado dahil ang problema nila, walang makainan. Walang restaurant, kaunti lang ang produkto sa grocery stores na Halal Certified.
Eh it should not be associated just with religion. Dahil kung titignan natin, Halal is an extra certification of affirmation na ang produkto ay malinis, napaka-pure, healthy. It’s a lifestyle product. Ganoon po ang perception at positive attributes na idinidikit sa mga Halal products.
Kaya sa atin pong mga nandito sa food fair na exhibitors ngayon, consider that your product be certified Halal and watch your market grow. Watch your product sales grow. Ibig sabihin makaka-penetrate na kayo sa ibang countries. And even Muslim buyers here and abroad can try and be a regular customer.
It’s an added market. Look at it that way. In our committee, meron na po tayong mga Halal certifiers. Ang DTI po ang ginawang chairperson ng Halal Export Development and Promotion Board. Meron na kaming mga certifiers para dumami na ang ma-certify na Halal food products.
As a second to the last item, the importance also of empowering MSMEs through trade fairs like this is ‘yung connection niyo po sa manufacturing. I always emphasize the importance of doing the products in the Philippines. These SMEs na nakapaligid po dito, they are made in the Philippines. They are manufactured here. Any product na manufactured dito at binili dito, ibig sabihin, less importation.
Kapag bumili tayo ng produktong gawang Pilipinas, bababa ang importation natin. Gusto natin bumaba ang imports at tumaas ang exports. So we need more suppliers, manufacturers, at nagsisimula po ‘yan sa mga MSMEs. Kapag dumami na ang nagma-manufacture dito, kokonti na ang ating importation, at madaragdagan na ang pwede nating i-export dahil may capacity na tayo.
‘Yun po ang importansya ng ganitong activities, you’re not just helping the MSMEs, you’re also helping the country reduce the trade deficit. Ang trade deficit, kung mas marami tayong iniimport kaysa ineexport, there’s only one solution. I-produce natin dito. Tapos bilhin natin. Tangkilikin natin ang gawang Pilipino. Tatak Pilipino, gawang Pilipino, dapat bilhin ng Pilipino. Pwede ba ‘yun? Para lumaki yung negosyo natin dito.
And last but not least, our Kapetirya na nandoon, it is a coffee shop, a brand started by DTI. We’re happy to announce that we will be launching it next week, Wednesday. Wala po si RD Myrna dito, ang RD natin sa CAR. It’s by the whole DTI team, but si RD Myrna po ang coffee queen naman.
Dine-develop po ang kape sa lahat ng kung saan sikat ang kape. Sa Cordillera, Bukidnon, etc. Lahat ng ito ibebenta sa Kapetirya. ‘Yun ang ila-launch natin. Ngayon kasi, ang Kapetirya, you can only find it in the trade fair. Now, it will be business that we can roll out sa iba-ibang lugar. ‘Yun po ang magadang development. And it will not just be government funds. Initiative po ito na may public-private partnership. May private sector. Because we believe, na kapag negosyo, private sector talaga ‘yan. But what we’re trying to do, is organize it in a way that will promote local Philippine coffee. And napakasarap. In fact, we’re exporting them, pero hindi masyadong sumisikat. It’s time na tayo na ang magdala ng brand para sumikat ang Philippine coffee.
At ito ang gagawin sa Kapetirya. Makikita niyo po to sa mga stalls, whether in Makati, Ortigas, anywhere, sa mga buildings, sa mga ground floor ng condominium, you will hopefully see a franchise able concept ng Kapetirya. Philippine coffee will be featured, promoted, and sold there. Hindi lang isang brand. Hindi ‘yung lumilitaw lang kapag trade fair. Parang Brigadoon—‘yung bansa na lumilitaw lang every hundred years. Ito magiging every day sa mga mainstream areas para sumikat pa ang Philippine coffee.
‘Yan ang mga programa ng DTI. At ang ating pangulo, ‘yan ang gusto niyang makatulong sa maliliit. Ang ating Pangulo, ang gusto niya matulungan talaga ‘yung mga maliliit na kababayan natin. At sa larangan ng negosyo, ito po ‘yung mga micro SMEs. Palakasin natin sila. Iangat natin ang buhay ng bottom of the pyramid, magiging middle class ‘yan. Kapag naging middle class ‘yan, wala nang mahirap.
With the President nga, mayroon pa kaming programa na Pondo sa Pagbabago at Pag-asenso (P3). ‘Yung mga nandito po, kung may umuutang sa 5-6, patayin niyo na ‘yun. ‘Yung utang, hindi ‘yung nagpapautang. Kasi mayroon nang programa, sinuportahan ng Pangulo natin. Binigyan tayo ng 1 billion pesos every year, para pautang. Walang collateral. Same day or following day ang approval. Tapos may pondo na kayo mula Php 5,000 hanggang Php 150,000. Walang dokumentong kailangan. Kailangan lang, may pwesto, may negosyo, makakautang na. Si Bong Go tumulong din sa atin para makahingi tayo ng budget d’yan.
Sa sumuporta sa atin, naka- Php 2 billion na. Ngayong 2019, another Php 1.5 billlion. Kaya thank you. Pampautang po ito. May panukalang batas din para maging hindi lang Php 1.5 billion per year, kundi maging Php 4 or 5 billion a year.
Pinapatayan na ako ng mic, kaya magandang hapon po sa inyong lahat.♦
Speech of Secretary Ramon M. Lopez, Youth Entrepreneurship Summit 2019
SPEECH OF SECRETARY RAMON M. LOPEZ
YOUTH ENTREPRENEURSHIP SUMMIT 2019
8 March 2019, World Trade Center
Good morning everyone. Alam niyo po, ilan taon na nating ginagawa ito with Go Negosyo. To our inspiring founder Mr. Joey Concepcion, how about a big hand? *applause* The passion is still there, nakikita niyo naman. Fourteen years na ba tayo, Joey?
The important thing is that we are doing thing for all of you out there. This is not for us. We want to share the successes that our community of entrepreneurs are experiencing. Gusto naming maranasan din ng buong sambayanang Pilipino. It’s a vision of our President, President Rodrigo Roa Duterte to uplift the lives of all Filipinos. ‘Yung poverty incidence natin, mawawala na, mabigyan lang ng isang trabaho o isang negosyo ang mamamayang Pilipino.
Kaya ang Go Negosyo, kasama po ang Department of Trade and Industry, we continue to partner and bring many of these activities. Activities that will start from big summits like these, seminars in all the 1,000 Negosyo Centers that we have sa mga probinsya. Hanapin niyo po ang pinakamalapit na Negosyo Center. Meron po tayong mga seminar doon that will give you mentoring, mastery, and mindset change.
‘Yung yes attitude, can do, winning attitude, ‘yan ang sekreto ng mga nagtagumpay sa buhay. And that mindset revolution is what we are trying to bring through Go Negosyo and DTI. Iyan po ang susi sa tagumpay. Because with that mindset, at dadagdagan pa ng natutunan ninyo in this summit, the seminars that we give out, the mentoring that we give out.
Kung gusto niyo ng pautang, the DTI gives out Pondo sa Pagbabago at Pag-asenso na hindi na kailangan ng collateral. You don’t have to submit many forms and fill out many documents. Parang nanghiram kayo sa 5-6 pero ipinagbabawal po natin ang 5-6. Kaya ito ho ang sagot natin sa 5-6 para magkaroon ng pautang para sa lahat ng maliliit na negosyante. Kahit mag tindera sa palengke, sari-sari store or karienderya owner, pwede pong lumapit dito. Startup businesses ng mga kabataan natin. Hanapin po natin ang mga credit delivery partners, pumunta lang po sa pinakamalapit na Negosyo Centers. We can also go to the DTI and Pondo sa Pagbabago at Pag-asenso websites.
Meron ding mga machines that can be lent out, given to you. Ang pinakaimportante sa lahat, kapag may produkto ka, we also provide market access. This is what we call Go Lokal! kung saan yung produkto niyo can be made present at i-showcase sa mga malls at mainstream market. This is free of charge thanks to our partner retailers.
Now, imagine all these services are also being put online—from lending to market access, with all our partners here. This is the beauty of technology. Technology is really the equalizer. Kapag nilagyan mo ng technology, pantay pantay lahat. Even those with huge resources and those with limited resources, kapag may technology na, you can access information and many markets worldwide. And by using technology, you can easily get financing. This is the advocacy that we are really pushing for with Joey Conception and Go Negosyo, we make sure to apply digitalization in your business models.
A lot of business models, in fact, are based on technology. It’s not just online selling, also platforms. The secret is to find out, ano ba ang problema na kailangang i-solve? I’m sure many of you can spot problems. Ang maganda po, to me, is to solve a social problem. Imagine the social problem of transportation, that’s why Grab came up. It becomes a relevant technology solution. Hindi lang technology for technology’s sake. It has to solve the problem, and it has to be a social problem.
Imagine also the crowdsourcing requirements of certain projects para sa mga magsasaka natin, there is one startup we mentored last time called Cropital, wherein ‘yung crowdsourced funds are directed to different partners, giving them the funds to plant their requirements. So many good things can happen with technology, as long as you think, ano bang problema ang iso-solve natin. Limitless po ang ating opportunities.
Sa mga bata, bagay na bagay talaga ng technology. Para sa aming nasa 30s, 40s, 50s, at 60s, we’re not that familiar with technology. But for you, this is your strength. This is really your equalizing factor that you should harness.
I would also like to say na noong panahon namin, wala kaming mga Youth Entrepreneurship Summit. And you’re very fortunate. We’re really doing this for you. This is for your future. We like youth entrepreneurs because they’re usually linked to innovation and creativity, makabagong mga ideas. Kaya ho, to us, we want to develop just any entrepreneur, but that who is innovative and creative.
Now is a good time to invest. I always say that in the Duterte administration, we’re very fortunate that we’re able to strengthen further the economy. We’re experiencing mataas na growth rate po. Above 6% growth. Ang unemployment rate is at the lowest level, 5.2% already. Dati po nasa mga 6.9% po ‘yan.
The kind of growth that we’re having is more stable. Because the services sector is not the only one pulling up the growth. Now, even manufacturing, even construction. They’re providing double digit growth rates. The economy is so stable, we’re looking forward to a good run. I always say that the economy is on a breakout. And with 107 million population, yung demographic natin bata. Average age, 23 years old. You can imagine that with this progress, we are creating a huge middle income. A larger consumer base. Dahil bata pa, maraming may trabaho, maraming may negosyo, lahat po may kakayahang maging consumer. And this larger consumer base is attracting further more investments that will create more jobs. So you can imagine the virtuous cycle momentum that the Duterte administration is bringing to have solid growth moving forward.
Kaya ko po sinasabi ito kasi this is the backdrop where your business will operate. In China, the last 30 years na nag-continuous growth sila, I think 40 years by now, lahat ng negosyo na nilagay nila doon, lumaki lahat. Kaya dumami ang mga milyonaryo at mayaman ngayon sa China. And these are the people you see around. Kaya na nang mag-tourist, mag-travel. It has become a prosperous society. This is what we’re beginning to see dito sa Pilipinas. Magiging prosperous na an gating mga kababayan at mas maganda po sa negosyo.
You have to start with something. You have to ride the economic growth and not get left behind. If you’re just on the fence, maiiwan po tayo. You have to invest in something. You work hard, be part of the productive sector, magtrabaho tayo or magtayo ng negosyo. At kahit anong negosyo ang ipasok niyo dyan, with proper training sa Go Negosyo at DTI, lalago po ‘yan. All the partner mentors who are with us today, the AFFI, the PFA, so many mentors teaching us. Imagine the kind of resources you have. Para sa inyo po to. You can maximize your stay, the whole day today, because this is really for your future. Magdandang umaga po sa inyong lahat.
Opening Remarks of Secretary Ramon M. Lopez, Philippine-Malaysia Business Forum
OPENING REMARKS OF SECRETARY RAMON LOPEZ
Philippines-Malaysia Business Forum
With H.E. Tun Dr. Mahathir Mohamad, Prime Minister of Malaysia
7 March 2019; Makati City
Ladies and gentlemen, good morning!
We wish to offer our warmest welcome to Dr. Mahathir Bin Mohamad, the Prime Minister of Malaysia. We are honored by your presence, being one of the foremost leaders and statesmen of the ASEAN Member Nations.
On matters pertaining to ASEAN leadership and geopolitics, your words are gems of wisdom that we highly value. I draw from my personal experience, having heard your valued interventions and sincere ASEAN-centric messages, especially during the recent ASEAN Summit in Singapore last November.
We also highly regard your sincere leadership, of the past and of the present, that steered Malaysia towards its socio-economic greatness, as well as your incessant drive at present towards good governance, and your fight against terrorism, illegal drugs, and criminality — and on this we fondly draw some parallelism with our own President Rodrigo Roa Duterte.
May I also take this opportunity to recognize the presence of my counterpart, Minister Datuk Darell Leiking of the Malaysia Ministry of International Trade and Industry (MITI). We were just together during last Saturday’s meeting on the Regional Comprehensive Economic Partnership (RCEP) in Cambodia. As you all know, as the chief trade representatives of our countries, both of us are working double time to push for the RCEP agreement to be concluded before this yearend 2019.
I would like to congratulate Malaysia as well for your stellar economic performance last year, with a GDP growth rate of 4.7% for 2018. Both the Philippines and Malaysia are considered economic bright spots in the region, and we’re glad to be one of your major trade and investment partners.
Malaysia has consistently been one of our strong trade partners, being our 10th largest trading partner with a total bilateral trade at US$6B. Malaysia has also been our 11th major export market and 9th top import supplier. In fact, among the Philippines’ top sources of approved foreign investments as noted by our Investment Promotion Agencies (IPAs), Malaysia posted the highest growth rate in 2017-2018.
With this increase, Malaysia is now our 5th largest source of approved foreign investments last year, next to China, Singapore, Japan, and British Virgin Islands. Approved foreign investments from Malaysia amounted to Php 15 Billion or $290 Million, which represents 8.2% of total approved investments in 2018.
Presently, Philippine and Malaysian companies have made major trade and investment in-roads in our respective countries. For example, Ayala Land is a majority shareholder in MCT. Aboitiz Equity Ventures’ food subsidiary, Pilmico International, is now operating in Malaysia after acquiring a majority stake in Gold Coin Management Holdings. Likewise, Jollibee held a grand opening of its milestone store in Malaysia last February 20.
On the other hand, CIMB Bhd. launched CIMB Bank Philippines last January 29 with its flagship branch in Bonifacio Global City. Another Malaysian company, MR. D.I.Y., opened its first store in the Philippines last January 5. And phase 1 of AlloyMTD Philippines’ project—the National Government Administrative Center (NGAC)—in New Clark City in Capas, Tarlac—is set to rise on schedule.
There are many other companies with presence in each of our countries, and we seek to develop more business matches with today’s meeting. For example, among our country’s priority sectors for investment promotion is infrastructure development. With these in mind, we hope to engage with MTD Group, Muhibbah Engineering, and Budi Technology, among others, who are present here today.
Meanwhile, many of our Philippine companies can find more opportunities in Malaysia. Steel Asia, Zuellig, and Sterling Group can benefit from Malaysia’s focus on manufacturing. Meanwhile, San Miguel, Universal Robina, and Zest-O Group can take advantage of their processing of agricultural produce and manufacturing-related services.
I also foresee potential partnerships and trade opportunities between our two countries. On our end, the Philippines is interested in pushing for agriculture, processing of high-value and value-added products and services, as well as technology and innovation that would address the 4th Industrial Revolution.
There are other trade areas that our two nations can concentrate on, like the Halal industry, the developing Barter Trade in Mindanao, which President Duterte has been encouraging to revive, and BIMP-EAGA. Given that Malaysia is regarded as a leader for Halal, and how the barter trade can benefit our neighboring towns, I am confident that we can have a fruitful discussion on these matters today.
Just to add: like Malaysia, the Philippines is also working towards implementing major economic reforms. President Duterte just recently-signed the Rice Tariffication Law, the Ease of Doing Business Law, the Philippine tax reform system, and other legislative measures. This is proof positive that the Philippine government is committed to economic reforms, liberalization, and pushing for greater trade and investment engagements.
Through stronger engagements in trade and investment, we are sure to expand our bilateral trade relations and solidify even further the ties between our two countries. We all look forward to the tremendous mutual gains that our two countries will surely experience, with this historic visit of His Excellency Prime Minister Mahatir.
The business forum this morning is surely a rare opportunity to dialogue directly with the Prime Minister, and so we wish to generate as many learnings, mutual understanding, and business leads.
Once again, our warmest welcome to our dearest Asean icon Prime Minister Mohamed and also to Minister Leiking.
Your presence definitely manifests the sincere openness and development-orientation of the leadership of Tun Mahatir.
Maraming Salamat po. Thank you very much and MABUHAY!!!
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.