DTI, DOST team up for MSME “Filipinovation”

Department of Trade and Industry (DTI) Secretary Ramon M. Lopez and Department of Science and Technology (DOST) Secretary Fortunato T. de la Peña signed an MOU to promote Filipino innovation, or “Filipinovation,” for entrepreneurs. 

“Innovation is when you fix something, even if it’s not broken. In entrepreneurship, continuous innovation in products, processes, business model, is the only way to survive,” said Secretary Lopez.

“Through the MOU, DTI and DOST will merge One Town One Product (OTOP) and Go Lokal entrepreneurs with DOST’s oneSTore.PH hubs. ‘OTOPrepreneurs’ may now also use DOST’s online store, oneSTore.PH, to sell their products”, Sec. de la Peña said.

Meanwhile, DOST will also provide selected Negosyo Centers with S&T Nooks for those who want to access DOST’s resources but don’t have internet connection.

MSMEs comprise 99.6% of enterprises and 70% of employment in the country, but only account for 35% - 40% of Gross Value Added contribution to the economy. Sec. Lopez said innovation can bridge this gap because when MSMEs transform raw materials into quality products, they can sell at premium prices and reach international markets.

“President Duterte wants to make the MSMEs smarter and bigger, not just in number, but also in terms of contribution to the economy. It’s easy to become an entrepreneur—but to have high quality, differentiated products is the real challenge, but it is their ticket to greater success and better quality life,” added Sec. Lopez.

DTI and DOST previously signed an MOU in 2017 to formulate and implement the Inclusive Filipinovation & Entrepreneurship Roadmap. To implement this, DTI has the following programs to help entrepreneurs, among others:

   •      Shared Service Facilities (SSF), a machine-lending service to cooperatives;

   •      Pondo para sa Pagbabago at Pag-asenso (P3), a low-interest collateral-free loan program to MSMEs;

   •      Kapatid Mentor Me and SME Roving Academy training programs; and,

   •     Go Lokal!, a project that discovers and improves MSME products and helps them reach mainstream markets.

DTI also developed the Inclusive, Innovation-led, Industrial strategy (i3s)—wherein the academe, industry, and government sectors collaborate to solve business innovation challenges.  

DOST on the other hand, provides the following services to MSMEs:

  •      Small Enterprise Technology Upgrading Program (SET UP), that provides machines and technology training to individuals or companies;

  •     Science and Technology Expert Volunteers’ Program (STEVPP), where S&T experts provide free consultations and assistance to communities and cooperatives;

   •      Testing and Calibration services to ensure that products reach health and quality standards; and

   •       Packaging and Labeling assistance.

*This is Press Release

PH Gets Chinese Companies’ Investment Pledges worth USD 9.8B

The Department of Trade and Industry (DTI) welcomed USD 9.8 billion-worth of investment intentions from Chinese companies that will cover the construction, electronics, agriculture, tourism, and pharmaceutical sectors, and will provide an estimated 10,800 employment opportunities.

“Investments are important in bringing more job opportunities for all Filipinos. Our bilateral cooperation with China continues to deepen and strengthen. We have agreed to discuss cooperation plans for the next five or even up to 10 years to move forward in specific fields,” said President Rodrigo Roa Duterte.

“As one of the world’s top investment destinations, the Philippines enjoys the confidence of foreign direct investors. And due to our enhanced bilateral and trade relations with China, Chinese companies have increasingly expressed interest in investing in our country,” added Trade Secretary Ramon Lopez.

The President witnessed the signing of nine Letters of Intent (LOI) from the following companies: Shanghai GeoHarbour Group, Jovo Group Co. Ltd. Guangdong, Zhongfa Group, Haocheng Group, China Green Agriculture Group, East-Cloud Biz Travel Ltd., China National Heavy Machinery Corporation, Sino BMG, as well as Shanghai Shinehigh Biotechnology Ltd. Co. and Zhejiang Dongyang Jinxin Chemical Co. Ltd. The signings were held at the sidelines of the Boao Forum 2018 held in Boao, China on 10 April.

The total approved investments from China grew by 53.61% from Php 1.52 billion in 2016 to Php 2.33 billion in 2017. Industries that played a big role in this breakthrough include manufacturing, electricity, service, and finance.

In 2017, China ranked as PH’s top trading partner, 4th largest export market, and top import supplier. PH exports to China grew by 9.73% due to the increase in exports of digital monolithic integrated circuits, cathodes of refined copper, and other fixed capacitators.

“We continue to improve the Philippine business environment and soon, we will be adopting new domestic policies and regulations to promote ease of doing business and competitiveness in various industries,” Sec. Lopez said.

Meanwhile, DTI is strengthening its presence in China by activating three offices and deployment of commercial officers in Beijing, Shanghai, and Guangzhou.

The Department will also lead the Philippine delegation to the inaugural edition of the China International Import Exposition (CIIE) on November. This major event is organized by the Chinese government to facilitate increase in imports from partner countries and contribute to balancing bilateral trade. The Philippine delegation will consist of major Filipino exporters and will occupy 100 booths in the Enterprise Zone.

*This is Press Release

DTI-DOST to expand MSME marketing capabilities through OneSTore.ph

The Department of Trade and Industry (DTI) will tie up with the Department of Science and Technology (DOST) to help micro, small and medium enterprises (MSMEs) expand their market and reach clients online with the OneSTore.ph.

“MSMEs are the backbone of the Philippine economy. And as part of President Rodrigo Duterte’s whole-of-government approach to assist MSMEs, we are teaming up with DOST to impact the lives of more Filipino entrepreneurs,” said DTI Secretary Ramon M. Lopez.

The OneSTore.ph is a first government e-commerce platform (Business–to-Customer and Business-to-Business platform) dedicated to marketing high-quality Filipino products of MSMEs through the worldwide web by “bringing quality products at Filipino doorsteps.”

This comes as DTI intensifies marketing capabilities of MSMEs to help them reach the mainstream market.

Under the OneSTore.ph agreement, DTI will Promote the oneSTore.ph to MSMEs through Negosyo Centers as a platform where they can market their products on-line.

At the same time, DTI will make Negosyo Centers accessible to clients of DOST and allow clients to display and dispatch their products with its payment and logistic partners in One Town One Product (OTOP) Philippines HubStores, subject to availability of space and to DTI priorities and promote oneSTore and provide signage for the spaces provided for oneSTore.ph and oneSTore hub in every OTOP Store identified as co-branded hub, among others.

The One Town, One Product (OTOP) Philippines is DTI’s collaborative program with national government agencies and local government units  as a customized intervention to level up the products of various localities and drive inclusive local economic growth.

DOST, on the other hand, will develop and maintain oneSTore.ph where its accredited Regional Hubs and MSMEs may sell products and services to its clients and engage with payment and logistics partners and provide better oneSTore.ph services to its accredited Regional Hubs, MSMEs and its partner agencies.

DOST will also Provide priority to jointly identified OTOP products for product development initiatives including improvements in packaging and labeling, subsidy or discounts in testing fees, equipment support such as the Small Enterprise Technology Upgrading Program (SETUP), and strengthen research and development efforts.

*This is Press Release

Philippines Successfully Completes its 5th Trade Policy Review in the World Trade Organization

Member  economies  of  the  World  Trade  Organization  (WTO)  praised  the Philippines’ economic performance as it completes its 5th Trade Policy Review in the World Trade Organization on 26 and 28 March 2018 in Geneva, Switzerland. The Review evaluates the country’s trade policy regime from 2012 to 2017.

DTI Undersecretary Ceferino S.  Rodolfo  headed  the  Philippine  delegation, with Undersecretary  for  International  Economic Relations  and  Philippine  Ambassador-Designate  to  the  WTO  Manuel  A.J.  Teehankee heading the DFA contingent. Undersecretary Rodolfo highlighted the Philippines economic  performance  during the review period and the government’s initiatives that were designed to achieve the goals of zero poverty and inclusive growth and to deepen policy reforms that ensure a more open economy, and an enabling business environment, devoid of any red tape. He also emphasized  the  work  done  by  the  country  on its  MSME  advocacies  and  FTA engagements.

Ambassador Juan Carlos  Gonzales,  Colombia’s  Permanent  Representative  and Chairperson of the Trade Policy Review Body of the WTO, recognized that the Review offered an excellent opportunity for other WTO Members to deepen their understanding of the trade, economic, and investment policies of the Philippines, pointing out that more than 330 questions from 22 Members were submitted to the Philippines during the review process. Ambassador Gonzales noted that:  Members  praised  the  Philippines  for  its strong  commitment  to  preserve  and  strengthen the  multilateral  trading  system,  and  its active  role  to  advance  the negotiations  in  areas such  as  fisheries  subsidies, ...Micro, Small and Medium Enterprises (MSMEs).

The WTO Report highlighted the Philippines 6.6% six-year average GDP growth from 2012 to 2017 and expressed optimism with President Duterte’s 10-point socio-economic agenda. In 2017, the country’s total trade amounted to USD 142 billion, up by 10% from 2016 and by 35% if compared in 2012. Quite significantly, in 2015, poverty incidence was reported at an all time low of 21.6%, as compared to 25.2% in 2012at the beginning of the review period.

Other critical reforms that were pursued in the country during the Review period includes the Customs Modernization and Tariff Act, the Philippine Competition Act and the creation of  the Philippine  Competition  Commission,  the  liberalization  of  several  key economic sectors, the  amendment of the Cabotage Principle of  the  1957  Tariff  and Customs  Code  through the  Foreign  Ships Co-Loading Act, the lowering of  tariff

*This is Press Release

DTI, DOF Explain TRAIN Package 2 to Japanese Investors

In efforts to enhance trade and investment relations between the Philippines (PH) and Japan (JP), Department of Trade and Industry (DTI) Secretary Ramon Lopez together with officials of the Department of Finance (DOF) addressed the issues and clarified the concerns raised by Japanese investors on the Tax Reform Acceleration and Inclusion (TRAIN) Package 2, which rationalizes tax incentives to investments.

“We would like to highlight the aspects of TRAIN Package 2 that would benefit new and existing investors. While Japan is our number one source of investments, there are still a large number of Japanese investors who have not located in the Philippines. The TRAIN Package 2 provides us with the mechanisms both to encourage existing investors to further expand their business, and to attract new investors into the country,” said Sec. Lopez.     

During the discussion, Japanese investors expressed their concerns on the new tax incentives for new and existing investors as well as the preferential corporate income tax.

According to Lopez, the proposed legislation is not meant to remove incentives, but in fact recognizes the important role of incentives and the need to make them more responsive, relevant and effective, i.e. they should conform to the principles of being performance-based, time-bound, focused, and transparent. 

Board of Investments (BOI) Managing Head and DTI Undersecretary Ceferino Rodolfo explained further that the second tax reform package will in fact provide better incentives.

“First, investors will no longer be limited to just the Income Tax Holiday (ITH) and the 5% tax on Gross Income Earned (GIE)—but will now be able to choose other incentives that may be more relevant, including long enough Net Operating Loss Carry-over, accelerated depreciation, and double-deduction of certain expenses critical to upgrading competitiveness such as R&D, training, and others,” said Usec. Rodolfo.

“Equally important, the TRAIN Package will remove the nationality bias as well as the export bias of incentives. This means that as long as an activity is listed under the Strategic Investments Priorities Plan (SIPP), this will be eligible for incentives regardless of citizenship of owners or the markets they will serve. For Japanese companies, they can receive incentives even if they will sell to the domestic market,” Usec. Rodolfo added.

Meanwhile, DOF Director Juvy Danofrata noted the concerns of investors on the sunset provisions for existing tax incentives. Danofrata said, “While transition mechanisms will be provided including replacing the 5% GIE with a reduced 15% corporate net income tax, we are open to suggestions on how we can design better transitions, as long as these will comply with the basic principles of being time-bound, performance-based, focused, and transparent.”

The discussion was part of the agenda of the 10th Philippine-Japan Economic Partnership Agreement (PJEPA) Sub-Committee on the Improvement of Business Environment (SC-IBE) Meeting on 22 March co-chaired by Sec. Lopez and Japanese Ambassador Koji Haneda. Officials from the Philippine Board of Investments, Philippine Contractors Accreditation Board, Construction Industry Authority of the Philippines, National Economic Development Authority,  Philippine Economic Zone Authority, Bangko Sentral ng Pilipinas, Department of Public Works and Highways, Department of Finance, Department of Labor and Employment, Manila International Airport Authority, Metro Manila Development Authority, Bureau of Internal Revenue, and Subic Bay Metropolitan Authority were also present during the meeting.