Bill to Institutionalize P3 Program Filed in Senate

Senator Aquilino “Koko” Pimentel III filed on September 19, 2018 a Senate Bill that will institutionalize the Pondo sa Pagbabago at Pag-asenso (P3) Program to further strengthen the landmark micro loan program of President Rodrigo Duterte that will provide relief to micro enterprises through alternative source of financing.

The Senate Bill No. 2017 or “An Act Providing a Socialized Microfinancing Program for Micro Enterprises Thereby Promoting Entrepreneurship” aims to address financing concerns of micro enterprises throughout the country and help them sustain their businesses.

Trade Secretary Ramon M. Lopez welcomed the news, saying it will further ensure funds are made available for micro enterprises to veer them away from onerous loans, particularly the “5-6” money-lending system.

“This is another milestone as we continue our drive to empower our MSMEs and alleviate poverty. Through this bill, we will be able to assist more entrepreneurs to have easy access to P3 loans that come in one-form, one-day processing, and don’t require any collateral, especially those in the countryside,” said Sec. Lopez.

On the other hand, Small Business Corporation (SB Corp) President and CEO Ma. Luna E. Cacanando said the filing of the Senate Bill will strengthen the Corporation’s mandate and will greatly contribute to the development of micro enterprises, which comprises the bulk of the micro, small and medium enterprise (MSME) sector.

Micro enterprises account for 90% out of the 99.6% from the MSME sector.

As the financing arm of the Department of Trade and Industry (DTI), SB Corp is tapped as the lead implementing agency of the P3 Program and is tasked to handle the fund delivery through direct lending to micro enterprises, wholesale lending to conduits that on-lend to micro enterprises.

Likewise, the House of Representatives in June 2018 also adopted a bill that will establish P3 Program as an affordable and easy access alternative source of financing for micro enterprises.

Under House Bill No. 7446 or the "Pondo sa Pagbabago at Pag-asenso" or "P3 Act," the House of Representatives seeks the creation of the “Pondo sa Pagbabago and Pag-asenso” or the P3 Fund, which will be made available for beneficiaries such as market vendors, agri-businessmen and members of cooperatives, industry associations, and cooperators.

As of September 9, 2018, the P3 Program has assisted over 50,000 micro enterprises throughout the country with a total of P1.5 billion of released loans.

Under the P3 Program, a micro enterprise can borrow between P5,000 up to P200,000 depending on its business need and repayment capacity with no collateral requirement.  Interest rate and service fees, all in, do not exceed 2.5% monthly.

The P3 Program serves as an alternative to the P30 billion “5-6” money lending industry that charges 20% nominal interest rate to MSMEs.

“We thank Sen. Koko Pimentel for sponsoring this bill in the Senate and being our partner in strengthening the MSME sector,” said Sec. Lopez.

DTI CHIEF TO LONDON OFWS: USE REMITTANCES TO START BUSINESSES

Department of Trade and Industry (DTI) Secretary Ramon M. Lopez encouraged overseas Filipino workers (OFWs) and their relatives to use remittances to start their own businesses back home to take advantage of the fast growing economy under the Duterte administration. This was conducted at the sidelines of the Philippine government’s trade and investment roadshow in London on Sept 21 – 26. Secretary Lopez, Philippine Franchise Association (PFA) president Richard Sanz, and PFA Director Chris Lim pitched franchising as a viable business model during the Kapihan sa Pasuguan in London last September 22. The event was organized by DTI and the Department of Foreign Affairs Philippine Embassy headed by Ambassador to the United Kingdom Antonio Lagdameo.

39K MSMEs get support from CARD’s P3 program

MORE THAN 39,000 micro, small, and medium enterprises (MSMEs) of the country are now receiving financial services from the Center for Agriculture and Rural Development (CARD), Inc. (A Microfinance NGO) in support to the Pondo sa Pagbabago at Pag-asenso (P3) program of the Department of Trade and Industry (DTI).

In 2017, CARD, Inc. signed a memorandum of understanding with DTI to become the government’s partner in strengthening the access of community members to the P3 program.

“This collaboration is part of CARD’s commitment of ensuring the growth of MSMEs to eventually build a poverty-free country. Poverty is a complex issue, hence, working with like-minded organizations and the government is a significant factor in the process,” said Flordeliza L. Sarmiento, managing director of CARD Mutually Reinforcing Institutions (CARD MRI) where CARD, Inc. is a member institution.

CARD’s P3 initiative

For this program, Sarmiento emphasized that CARD is not receiving any financial support from the government. “We will be using our own funds for this program. In terms of policies, it will be aligned with the guidelines of the program accordingly,” she added.

The program prioritizes to reach the market vendors and agri-businessmen in the 20 provinces under the government’s P3 program namely, Sorsogon, Zamboanga Sibugay, Negros Oriental, Leyte, Catanduanes, North Cotabato, Western, Eastern, and Northern Samar, Mountain Province, Lanao del Norte and Lanao del Sur, Agusan del Sur, Siquijor, Zamboanga del Norte, Sultan Kudarat, Bukidnon, Maguindanao, Sarangani, and Sulu.

“These microentrepreneurs can avail a loan up to PHP100,000 maximum with an affordable interest rate,” said Jocelyn D. Dequito, executive director of CARD, Inc.

The loan is payable in 12 months maximum on either a daily or weekly basis. “The program is consistent with our regular microfinance services. The terms are also flexible,” added Dequito.

Potential clients may avail the loan and can be processed within 24 hours, following the guidelines of CARD. This, according to Dequito, is their way of fighting against usurious lenders who are very quick in providing loans to people. “We have streamlined our processes to be become relevant and respond immediately to the changing needs of our clients,” added Dequito.

Growing businesses

On September 3-4, 2018, Dr. Jaime Aristotle B. Alip, the founder and chairman emeritus of CARD MRI, visited the P3 beneficiaries of CARD in Tagum City and Koronadal City, respectively.

CARD MRI, according to Dr. Alip, is in the business of poverty eradication. “Providing families with financial access is the first step towards poverty eradication. And we are happy to see our clients who are doing well in their respective businesses,” added Dr. Alip.

Edlyn Soronez, P3 beneficiary from Tagum City, said the program helped her grow her flower shop business. “I am thankful to become one of the beneficiaries of the program. I can now buy enough stocks for my growing clients,” shared Soronez.

Moreover, Nelly Pabillon said that she is thankful to CARD for granting her PHP28,000 loan for her vegetable trading in Koronadal City public market.

Dr. Alip also emphasized that these microentrepreneurs will be able to dictate the own course of their lives when and only given the access to asset ownership. “It is our hope that through our microfinance programs and this P3 initiative of the government, more families will have the capacity to own assets, invests in businesses, and saves for the future,” said Dr. Alip.

CARD also guaranteed that this P3 initiative will continue to be reinforced. “Even if the agreement is only with CARD, Inc., we have also encouraged our three banking institutions to entertain potential clients for the P3 program,” assured Dr. Alip.

As of July 2018, CARD, Inc. has already disbursed a total of PHP450.9 million loans to 39,384 clients.

CARD MRI is a group of 21 institutions that aims to eradicate poverty in the country. It has three banking institutions, the CARD Bank, CARD SME Bank, and Rizal Bank, Inc., which are operational in some of the concentrated areas covered by CARD, Inc.

“We are one with the government in fighting poverty in the country. Moving out from the claws of poverty can only be made when all the private and public sectors and the community itself work together as one,” concluded Dr. Alip.

PRESS STATEMENT OF SECRETARY RAMON M. LOPEZ

Today, I instructed the Department and Trade and Industry-Competitiveness Bureau (DTI-CB) to release to the Philippine Anti-Corruption Commission (PACC) the working draft of the Implementing Rules and Regulations (IRR) of RA 11032 or the Ease of Doing Business and Efficient Government Service Delivery Act of 2018.

In response to the concerns raised by the PACC, we wish to report to the public the following:

1. The DTI-CB, as the temporary secretariat of the Anti-Red Tape Authority (ARTA), has been hard at work, applying good regulatory practices in crafting the IRR. As temporary secretariat, DTI-CB is following a strict timeline and a broad-based consultative process, as follows:

a. Drafting of Version 0 between the DTI and the CSC teams and coordinating with other agencies like the departments of Interior and Local Government (DILG) and Information and Communications Technology (DICT), the National Economic Development Authority (NEDA), and the Bureau of Fire Protection (BFP) regarding specific provisions in the law

b. Initial consultations with the agencies involved in the IRR specifically, DILG, NEDA, the Department of Finance (DOF), the Philippine Statistic Authority (PSA), the Cooperative Development Authority (CDA), the Securities and Exchange Commission (SEC), the Ombudsman, the Housing and Land Use Regulatory Board (HLURB), and the Union of Local Authorities of the Philippines (ULAP);

c. Consultative meetings with agencies under the following: The Office of the President (OP); Government Owned and Operated Corporations (GOCCs); DTI and the departments of Tourism (DOT), Foreign Affairs (DFA), and Energy (DOE); the Labor, Science, and Technology Cluster (DICT, DOE, DOLE, DOST); the Agri, Agra, and Environment Sector (DA, DAR, DENR); and the Peace, Justice, and Security Cluster (DND, DILG, DOJ).

Briefing sessions with the Banko Sentral ng Pilipinas (BSP), as well as with Food and Drug Administration (FDA) were also held.

2. We are now in the stage of analyzing, and questioning the working draft and testing its possible impact using a public consultation process. We are bringing the proposed IRR to where it matters most, the Filipino citizen. Even as we speak, there are three teams that have been deployed to the regions that are currently holding public consultations.

We are effectively covering both public and private, gathering their comments, suggestions, and even complaints about government services to ensure that this IRR will be a regulation that is both effective and efficient.

3. We are very mindful of the legislative intent of the EODB-EGSD Act, its impact on government employees, and its huge potential to improve ease of doing business in the country. Thus, it is incumbent upon us in the executive branch to ensure that we come up with an IRR that is well designed.  After all, this will serve as the guideline for all implementing agencies.

4.  We deem it more prudent to undertake a carefully crafted, broad-based consultative process that will result in an IRR that is both responsive and clear.

As a final note, I dare say that working in government is indeed a supreme sacrifice as officials run the risk of having their reputations besmirched and threatened with lawsuits despite their dedication to the duty.

DTI-CB is just a temporary secretariat, but it has been actively involved in the transition process, by drafting the IRR, securing budget from the Department of Budget and Management (DBM) & OP, and spearheading information campaigns and consultations.

Let me assure the public that there is no delay, as we trust the wisdom of Congress in setting a 90-working day deadline, which shall be on October 22.

As the chair Of the EODB/ARTA Council, let me clarify that the law will be implemented by the Anti-Red Tape Authority to be headed by a Director General and three Deputy Director Generals. Thus, we eagerly await for the appointment of the Director General of ARTA who will also be the signatory of the IRR.

Meanwhile, instead of issuing press statements, I am extending this invitation to the PACC to be actively involved in the crafting of the IRR for RA 11032.

PH Signs Two Protocols to Help Businesses, MSMEs export within ASEAN

The ASEAN Economic Ministers (AEM) signed the First Protocol to Amend the ASEAN Trade in Goods Agreement (ATIGA) that will facilitate the implementation of the ASEAN-wide Self-Certification (AWSC) Scheme. This is a simplified and streamlined procedure that will help businesses use the zero tariffs under the free trade agreement (FTA) between ASEAN Member States (AMS).

Likewise, the high-level economic officials signed the Protocol to Implement the 10th Package of Commitments under the ASEAN Framework Agreement on Services (AFAS). This will provide preferential markets for Filipinos engaging in export services such as IT-BPO, tourism, and logistic sectors when doing business across the nine other AMS.

ASEAN Self-Certification is Trade Facilitation

Department of Trade and Industry (DTI) Secretary Ramon M. Lopez, representing the country as the Philippine (PH) AEM Leader, said: “ASEAN is virtually tariff-free, and efforts are now focused on trade facilitation initiatives that will ensure the ease in the flow of goods within the region to complement free trade.”

“The AWSC will minimize burdens associated with administrative compliance and decrease transaction costs. Overall, the scheme is expected to improve the ease of doing business, thereby making it easier for PH companies to use the preferential tariff treatment under the ATIGA,” Sec. Lopez added.

ATIGA has been in place since 2010 and provides for the elimination of import duties for 98.7 percent of the product lines of ASEAN Member States.

Under the AWSC, exporters may apply for Certified Exporter (CE) status and support their claim that their goods are eligible for duty-free tariff under ATIGA. This may be used as an alternative to a Certificate of Origin (CO) Form D. In the current regime, for exported PH goods to enjoy ATIGA benefits, exporters must apply for a CO Form D for every shipment. This must be applied manually and can only be done on regular work days and only during office hours.

The AWSC promotes convenience and leads to cost savings. It also improves distribution timelines as weekend shipments will not be delayed due to administrative limitations of the CO Form applications.

“This will be good for businesses, especially our Micro, Small, and Medium Enterprises (MSMEs). It will make it easier for them to use the FTA, as well as enjoy zero tariffs when they sell to other ASEAN countries,” explained Sec. Lopez.

According to the PH trade chief, the use of FTA will make exports more cost competitive as exporters will no longer have to pay import duties.

The initiative has received positive feedback from the business sector. They also commended the strong push for ease on trade facilitation. AWSC is one of the priority request of the ASEAN Business Advisory Council (ASEAN BAC), which is a new scheme is user-friendly and supports the business models of today.

Under ATIGA, import duties have mostly been brought down to zero percent. But businesses have a hard time accessing this because of complicated procedures.

Certified Exporters can make the claim that their goods meet the requirements of the ATIGA, at their own convenience and exactly when they need it, be it on weekends or on holidays. It does not require repeated applications for CO Form D. It will save time and money.

The Protocol and the ASEAN-wide Self-Certification Scheme is expected to be implemented by all ASEAN Member States by the first semester of 2019. ASEAN is composed of Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.

“We have this FTA in place and we want our exporters to maximize its use. It will help make our MSMEs more competitive in the global market” Sec. Lopez noted.

DTI and other government agencies such as the Bureau of Customs and the Tariff Commission will be going around the country to promote and explain what the ATIGA and the AWSC Scheme is all about.

Towards Services Integration

Sec. Lopez also emphasized the importance of trade services in the region following the signing of the 10th AFAS Package.

“We are confident that this package will be a catalyst towards a conducive export environment for service providers and businesses, including our MSMEs,” the PH AEM Leader said.

The AFAS was first signed in December 1995, and it pushed for succeeding liberalization packages as part of efforts to reduce barriers to the service sector in the region.

The latest AFAS Package allows market access and export to a range of new sectors, namely: Communication Services (e.g. export of Filipino soap operas), Health Services (e.g. medical tourism), Distribution Services (e.g. franchising), Education Services, Construction and Related Services, Transport Services, among others. These sectors comprise export interest to PH.

The country’s merchandise trade with ASEAN in 2017 was valued at USD 10 billion and accounted for 14.7 percent of total PH exports.

PH’s total services export has also continued to increase in recent years, amounting to USD9.34 billion in the first quarter of 2018, an increase of 17.5 percent from USD7.95 billion last year.