Gov’t needs clear industrial development plan

A top official of the Philippine Chamber of Commerce and Industry (PCCI) has urged the government to draw up a clear industrial development plan.

PCCI vice president for industries Ronald Chua said that after the economic team of Pres.Benigno Aquino III laid down the administration’s economic development agenda during the recent business conference, the was no plan or action agenda mentioned for the shrinking industrial and manufacturing sector, including the building of specific big-ticket infrastructure projects.

Chua who is president of the Cathay Pacific Steel Company, one of the few survivors in the domestic steel-making industry, noted that in all the presentations made by members of the Aquino economic team, the growth was planned to come from investments in tourism and the business process outsourcing industries.

Before Sec. Cayetano Paderanga became the government’s chief economic planner, he had been championing the revival of the country’s industrial sector, stressing that growth provided by the services sector would not be sufficient to create the quality jobs that millions of young Filipino graduates need each year.

Chua added that industrialization has been the chief development strategy for sustained growth of all of the newly industrializing economies in Asia.

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Phil fruits and vegetables to lose competitiveness

Local fruits and vegetables would further lose their competitiveness and eventually could not enter the ASEAN export markets in the next few years should these remain non-compliant to quality and safety standards set by importing countries.
 
This was underscored by Edralina Serrano, professor of the University of the Philippines Los Baños’ Postharvest and Seed Sciences Division during the recently held Agrilink agribusiness exhibition and seminar.  

Prof. Serrano noted an increasing demand by importers, retailers and customers for producers or suppliers of fresh produce and food products to implement quality assurance systems particularly the Good Agricultural Practices (GAP) to assure food quality and safety throughout the food chain.

Food-borne diseases could result in losses of market access and credibility, foreign revenues for the exporting countries and lose of competitiveness, said Serrano.

“Importers will not accept those that are not GAP-compliant or those that have no certification for safety and quality,” she said.

“And eventually by 2015 under ASEAN, we could not export to any ASEAN country unless farms where products are sourced are GAP-compliant.”

Citing a data, Serrano said one vegetable farm and three fruit farms implementing GAP in the Philippines, compared to Vietnam’s 3,000 farms and Thailand’s 53,582 farms.   

She attributed this problem to the difficulty to attain compliance since GAP is voluntary, and the lack of awareness about the benefits of having a quality and safety certification.

Serrano also blamed this to inadequate infrastructure, particularly the central data system towards the establishment of a national traceability system like the ones in Taiwan, Korea, Japan and Thailand. 

To improve GAP compliance in the country, the government should undertake massive promotion of the GAP program, a similar move undertaken by Malaysia to raise awareness of consumers about the benefits of GAP.

Moreover, Serrano encouraged local exporters to provide logistic support and training program to small farmers and producers, supplying them with fresh produce and food products.

The academe, particularly UPLB, could provide basic science-based information on the nature of hazards or toxic contaminants, a quality assurance program concern in food safety, she said.

“All countries are now setting standards for quality and food safety. So if we can’t meet their standards, then we cannot export. We have to comply because under the WTO, we are bound by these standards. Sanitary and phytosanitary issues could be addressed by complying with GAP,” Serrano stressed.

MFTA urges gov’t to hike production capacity

The Multisectoral Fair Trade Alliance (MFTA) has urged the government to step up its efforts in increasing production capacity to maximize the benefits offered by the free trade agreements (FTAs).

MFTA lead convenor Wigberto Tañada said bringing back development in economic trade planning requires improving one’s education, health and income. “This may also entail transforming individual entrepreneurship to a collective entrepreneurship.”

“FTA believes that our trade policies should be inextricably linked to these two goals. They underline the requisites for undertaking trade with the national interest in mind,” he noted.

Tañada said the country needs a clear development framework in support of its own development priorities should it continues to enter into global, regional or bilateral free trade agreements.

In entering into many FTAs through the ASEAN with China, Korea, New Zealand, Australia, or India, the Philippines likewise should seriously study the feasibility and employment effects of such arrangements, Tanada stressed.

“If it does this based on simply and again on a narrow economic liberalization agenda, it will again lose – as what has happened in the last three decades or so,” Tañada said.

Most food firms, for their part, see more benefits in new business opportunities brought about by FTAs the country has entered into.

However, they have to contend with sanitary and phytosanitary (SPS) or technical barriers to trade (TBT) which are being used by other countries to deter competition and act as disguised restriction to market access.

“More than the tariff issues, food firms are more challenged by SPS and TBT and are looking for channels to address these barriers. They experience many problems in adapting to complex procedures, mechanisms and legal and technical interpretation of the SPS agreements,” said Imelda Madarang, vice president and general manager of RFM Corporation’s Corporate Exports Division.

Madarang said overlapping and varied interpretations, certification requirements, costs of testing and clearances render firms uncompetitive.

But while there are avenues that provide negotiations on trade issues meant to increase exports, she believes that no amount of negotiations could improve trade if the products do not meet the requirements of the export markets.

“The benefits of the FTAs will only be reaped by those that have achieved competitiveness,” she said. “On the contrary in fact, if we are not ready, opening up the markets may prove to be threats that can shut out our products from global trade.”

Gov’t to intensify farm exports

The government is set to intensify the promotion of farm exports to take advantage of the expanded global market access under the free trade agreements and to help address the lackluster export performance of the agriculture sector.

To effectively promote agricultural exports, the Deparmtnet of Agriculture aims to strengthen links with the Department of Trade and Industry (DTI) and the Department of Foreign Affairs (DFA).

In a recent Philexport board of trustees meeting with the government trustees, the Department of Agriculture has signed a memorandum of agreement with the DTI and the DFA to promote agricultural exports and lure in more investments into the farm sector.

Philexport trustee for food Roberto Amores pointed out that a measly 2.9 percent of investments went to agriculture-related projects from 2001 to 2008.

Meanwhile, taking advantage of the preferential access to the markets of its FTA partners, the agriculture department would would target China, Japan and South Korea.

The DA will also intensify its investment and export promotion efforts in the Middle East and the EU, where export performance of the country has deteriorated in the last five years.

Product-wise, the DA will strive to enhance the export competitiveness of rawns,  fruits and vegetables, especially onions, of which export growth has been constrained by the quality and safety standards imposed by export partners, particularly Japan.

Market players to cash in for profits

Market players are likely to cash in for profits following a rebound on Friday
as the composite index gained 8 points.

Stock analyst Prince Anthony Yeung of AB Capital Securities expects trading to
slow down a bit as investors focus on companies that are scheduled to release
their figures for the third quarter.

Investors took a wait and see attitude as the earnings season kicks this next
week. There have already been a few companies that have announced third quarter
earnings but more should come next week, says Yeung.

Among those scheduled to release their corporate earnings are index issues such
as PLDT, ICTSI, and the Aboitiz group.

Yeung advised investors to stick to companies that are seen to report not only
impressive numbers for the third quarter but also rosy outlooks for 2011.

“From recent price movements it would seem that the likes of ICT, AP, Alliance
Global (AGI), and SCC are expected to reveal great third quarter figures,”
saysYeung.

“These stocks have been moving higher in the past weeks. The market is seen to
move flatly this week. The bias will come from whether the results reported will
meet expectations.”

BPI Securities noted that last Friday’s session closed on a lackluster trading.
Value turnover stood at P5.5 billion with a net foreign buy of P216 million.

The most active issues were PLDT, AGI, EDC, Megaworld, SM, MPI, Banco de Oro and
URC.. Advances outpaced declines 73 to 61 while 43 were unchanged

Week on week, the composite index dropped 18 points. BPI also noted that the
market movement has been limited to only selected stocks albeit a number of
corporate income results has been released.

Adding to the tempo was the recomposition of PSEi Index wherein stocks like GMA,
SECB and SMC were taken out and replaced by DMC, JGS and FGEN.

SWS survey reveals Pres. Aquino to keep his promises

The Philippine Social Weather Survey (SWS) found high expectations of Pres. Benigno “Noynoy” Aquino III to keep his promises and serve the poor.

The survey found 44% expecting Pres. Noynoy Aquino to keep most of his promises in his July 26, 2010 State of the Nation Address (SONA), compared to only 19% who expected Pres. Gloria Macapagal-Arroyo to keep all of her promises in her July 23, 2001 SONA, based on the September 2001 survey.

The September 2010 survey found 78% aware of Pres. Aquino’s SONA, compared to 44% aware of Pres. Arroyo’s SONA in 2001.

It also found 48% saying Pres. Aquino is serving the interest of the poor, compared to only 25% in 2001 and 19% in 2007 who said Pres. Arroyo was serving the poor.

Higher public attention to PNoy’s SONA

The September 2010 survey found that 78% were aware of Pres. Noynoy Aquino’s July 2010 SONA. This compares to September 2001 when 44% paid attention to Pres. Arroyo’s July 2001 SONA [Table 1].

On Pres. Aquino’s SONA, 56% watched it live on television, 15% heard about it on TV, 9% heard about it from other people, 8% listened to it live on radio, 5% heard about it on radio, 3% read about it on the newspapers, and a few (0.1%) learned about it on the internet.

On the other hand, in 2001, 25% watched Pres. Arroyo’s SONA live on television, 12% heard about it on TV, 6% heard about it on radio, 5% listened to it live on radio, 4% read about it on the newspapers, and 2% heard about it from other people.

PAL suspends Manila-Brisbane flights

Philippine Airlines (PAL) is realigning its Australian operations starting with the temporary suspension of flights to and from Brisbane effective October 31, 2010.

Consequently, the flag carrier’s five times a week flights to Melbourne will be adjusted to thrice weekly, while flights to Sydney – one of PAL’s most popular Australian destinations – remains unaffected with five times weekly services, PAL spokesperson Cielo Villaluna said.

Villaluna said the decision to temporarily halt Brisbane services was due to marketing considerations.

Passengers to be affected by the flight realignments would be properly notified by PAL’s contact center and advised on the best options to proceed to their respective destinations, she said.

Villaluna stressed that Australia remains an important market for Philippine Airlines. Recognizing the route’s growth potential, she reiterated PAL’s long-term commitment to the island-continent.

She stressed, however, that market conditions and the onset of the lean season necessitated some changes in the number of destinations and frequency of flights the flag carrier mounts to Australia.

Half of Philippine SMEs hike IT spend

Almost half of Philippine small and medium-sized enterprises (SMEs) are increasing  their IT expenditure in 2010 to ensure the success of their businesses.

Only 10 percent say they are decreasing their IT spending this year, according to International Data Corporation’s (IDC’s) annual survey of the IT buying behavior and adoption plans of enterprises in the country.

Although SMEs appear to be inclined to invest in technology this year, reduction of total IT cost still remains as a top IT-related priority for more than a quarter of the respondents, considering that operational expenses have increased year-on-year.

“With economic prospects looking up, most SMEs regard IT as an essential tool in achieving longer-term business growth,” said Pamela Joy Sumanga, analyst for peripherals research at IDC Philippines.

“Whether in the form of adopting social media technology as a means of pushing their products and services, building more dynamic websites, reengineering back-office functions to become automated, or improving after-sales support through a sound IT and telephony system, SMEs are expected to put a lot of effort toward IT capacity building for longer-term strategic growth,” said Sumanga.

In the near future, IDC believes that SMEs in the Philippines will generally remain aggressive with regard to using technologies.

This is driven by the need to drive long-term strategic growth in order to finance pressing concerns such as product and service improvement and relationship-building initiatives.

Local SMEs are looking at spending on front-office applications and system infrastructure for software deployment plans.

Jubert Daniel Alberto, Research Manager, IT spending at IDC Philippines said: “The economy in 2010 started on good footing. This has laid the ground work for further IT growth in the coming years. Vendors should align their products and services to serve the industry-specific needs of their customers, and beef up their channel networks to reach more market segments.”

Business sector urged to promote biodiversity

The Philippine government has urged the business sector to help promote biodiversity, a dynamic and vital component of the environment.

In a message read by Ecosystems and Research Development Bureau (ERDB) Director Marcial Amaro, DENR Secretary Ramon Paje stressed during the conference on business opportunities in biodiversity that the business sector has a big role to play in the promotion and conservation of biodiversity, pointing out the link between business and biodiversity.

“In the Philippines, businesses depend on biodiversity for their operations. They rely on plants, animals and the ecosystems to provide them with food, water, paper, fiber, medicine, building materials, and fuel, needed in their operations,” Paje said.

He also appealed to medium and small enterprises to get themselves involved in biodiversity promotion since their operations also have either positive or negative impact on biodiversity.

“If we can also enlist small and medium businesses for biodiversity promotion, we should be able to achieve truly dynamic results,” Paje said.

The conference, attended by business leaders, representatives from academe, civil society, media and other sectors from some ASEAN-member countries, aimed to encourage business to support biodiversity conservation efforts as well as discuss the current biodiversity situation in the ASEAN region.

This came on the heels of a study from the ASEAN Center for Biodiversity (ACB) showing that the deterioration of biodiversity resources in the region is caused by unsustainable patterns of production and consumption.

The study revealed that biodiversity resources are being over-exploited due to human lifestyle and consumption patterns which are critically incompatible with the world’s remaining natural flora and fauna.

The ACB study further showed that overfishing has threatened 64 percent of Southeast Asian coral reefs; illegal wildlife trade is valued at $10 billion to $20 billion annually.

NEDA rolls out disaster risk reduction initiatives

The Philippine National Economic and Development Authority (NEDA) is rolling out disaster risk reduction (DRR) initiatives in the development plans of provincial governments throughout the country.

The DRR guidelines were developed by NEDA in 2008 to enhance natural disaster risk reduction efforts in the local development planning process.

The guidelines introduced a disaster risk assessment methodology that enable local government units (LGUs) to identify areas at risk to natural disaster and the appropriate mitigation measures.

The roll out is supported by the UN Development Programme (UNDP) and the Australian Aid forInternational Development (AusAID).

The project incorporates climate change adaptations and sectoral impact parameters into the DRR guidelines.

“We expect at least 50 provinces throughout the country to complete theirDRR/CCA-enhanced provincial development and physical framework plans by the end of 2011,” said Director Susan Jose of the NEDA-Regional Development Coordination Staff.

Jose added that around 150 development planners from the regional line agencies and academic institutions were already trained by NEDA to comprise the pool of regional trainers that will directly assist the provinces.