Annual Report 2006

DTI Annual Report 06-07 | 1

2 | DTI Annual Report 06-07

About the Cover

“Convergence,” the dynamic act of blending together

into a cohesive whole and “Breaking Barriers,” the

drive to remove bottlenecks and impediments, to

think out of the box and strive for greater efficiency

are the themes which summarize DTI’s beehive of

activities for 2006 and 2007. These twin themes are

captured in a mosaic of pictures to vivify the

Department’s four Major Final Outputs (MFOs)

namely: 1) International Trade Policy Negotiation,

Facilitation and Promotional Services; 2) Industry

Development and Promotion and Facilitation

Services; 3) Development and Promotion Services for

MSMEs; and 4) Consumer Welfare and Protection

Services. With vigor and laser like focus, DTI zeroed

in on the abovementioned MFOs to achieve its

targets—the highlights of which are summarized in

the pages of this two-year annual report.


DEPARTMENT OF TRADE AND INDUSTRY

ANNUAL REPORT2006-2007

CONVERGENCE AND BREAKING BARRIERS


Over the years, we at the Department of Trade and

Industry (DTI) took part in the government-wide

orchestrated efforts to shore up the economic

landscape of our country. Even as we came to

grips with the emerging volatility of the global economy,

we did not waver as an organization but instead took public service to

a higher level with innovative measures that set the tone for good

governance.

As we recall in 2006, our economy posted a growth rate of 5.4% that

caught the attention of the international community. More than just

the strengthening of our macroeconomic fundamentals, we joined

hands with the private sector to curb red tape and simplify business

dealings. Investments poured in as we forged stronger ties and

opened new ones. With renewed confidence, the total approved

potential capital inflows for that year reached P271.9 billion. Much as

we undertook strategic promotions to increase trade and

investments, we also remained committed to pursue campaigns to

enlighten and empower consumers.

The year 2007 was even more auspicious as our economy defied

modest expectations and soared to levels unforeseen over 30 years

by posting a 7.3% GDP growth. Total approved investments increased

to Php349.08 billion, 28.67% higher than the year before. Even in the

midst of skyrocketing oil prices, the world took notice of our

consistent development patterns. During that year, higher

government and private spending as well as OFW infusions propelled

local trading, giving much-needed stimulus to the construction and

real estate sectors, among others. Our flagship services industry,

particularly those which utilize information and communication

technology (ICT) and our innate competence on business processes,

continued to buck the downtrend and remained upbeat for the long-

term haul. Inflation was moderate even as our overseas workers

continued to post record remittances to beef up our national income.

Investment portfolios exceeded the usual expectations as we

experienced calculated expansion of globally integrated enterprises.

The initiatives of these industrial giants rubbed off on other sectors.

Foreign and local investors responded alike by launching big-ticket

projects in the fields of energy, mining, logistics, and infrastructure.

We helped prop up the velocity of the local economy with measures

like stronger domestic financing, marketing, and training programs.

We reached out to stakeholders nationwide to ensure synergy and

acceptance of our blueprints like the Small and Medium Enterprise

(SMED) Plan, One Town One Product (OTOP-Philippines) among others.

We created single windows for clientele interface with the creation of

the National Economic Research and Business Assistance Centers

(NERBAC) in the capital and field units. With these centers in place

and with the able structure of our regional and provincial offices, our

frontline services were effectively delivered to both business and

consuming publics.

On the international front, we sought to level the playing field by

partaking actively and extracting concessions in high-level trade

negotiations multilaterally, regionally and bilaterally. We shall

sustain our advocacy for access to the global village to derive as much

benefits to our industries as possible. In the same breadth, we will

continue to pursue measures to streamline export and import

processes.

In the face of current global financial slowdown, we shall strive to

sustain our achievements by taking a more proactive role in nurturing

our economic growth. Even as we help institute measures to face

these challenges, we are confident that with firm resolve to work as a

cohesive organization, we expect even greater things to come.

Mabuhay!

PETER B. FAVILA

Secretary

MESSAGEFROM THESECRETARY


About the Cover 2Message from the Secretary 4Table of Contents 5

Convergence (2006) 6

MFO 1: International Trade Policy Negotiations, 8Facilitation and Promotion Services

Business Development Program 13

MFO 2: Industry Development and Investment 20Generation, Promotion and FacilitationServices

MFO 3: MSME Development and 24Promotion Services

MFO 4: Consumer Welfare and Protection Services 29

MFO 5: Good Governance Measures 32

Special Projects 36

DTI in the Countryside 38

One Town One Product (OTOP) Philippines 44

Breaking Barriers (2007) 46

Expand Exports 48

Business Development Program 56

Increase Investments 60

Support for MSMEs 63

Care for Consumers 70

Good Governance 74

Special Projects 76

DTI in the Countryside 77

One Town One Product (OTOP) Philippines 80

DTI Organizational Structure 88

Directory of Key Officials 89

*MFO -Major Final Output

TABLE OF CONTENTS


INTERNATIONALTRADE POLICYNEGOTIATIONS,FACILITATIONAND PROMOTION

Exports grew by 13.99% from US$41.25 billion in 2005 to US$47.03billion in 2006, exceeding the 10%growth target of the government. Thecountry’s top export markets wereGreater China, USA and Japan, whichabsorbed 56.73% of Philippine totalexports. Exports to these marketsreached US$26.68 billion.

Greater China, composed of People’sRepublic of China (PROC), Hong Kongand Chinese Taipei, continued to bethe country’s top export destination.Exports to China grew by 10.9% toUS$10.32 billion, mostlytelecommunications and audio-visual equipment. The Philippines isPROC’s third largest supplier ofelectronic products such as parts ofautomatic data processing andelectronic integrated circuits.Exports to US also grew by 15.9% toUS$8.6 billion. Japan was thecountry’s third largest export market,taking in Philippine products worthUS$7.8 billion.

Total exports of the revenue streamsexpanded at a faster rate of 19.14%compared to traditional exports’ 9%,indicating an encouraging trend indiversification towards non-traditional export products.

Electronics continued to be thecountry’s top export product,accounting for 62.92% of totalexports. Exports of Philippineelectronic products grew by 8.39%brought about by sustainedworldwide demand for personalcomputers, cellular phones, MP3players, flat panel displays, anddigital cameras.

Meanwhile, all revenue streamsexport products grew except forconstruction and organic products.Food exports amounted to US$1.3billion, expanding by 10.51% due toincreases in shipment of processedfood, beverages, fruits, andvegetables. Shipments of mineralproducts rose by 151.22% drivenmainly by strong demands fromChina.

Motor vehicle parts sustained itsgrowth at 9.3% as exports of autoparts to Japan and China increasedby 10.88% and 123.22%, respectively,in the first 11 months of 2006.Exports of home furnishingsexpanded by 86.90%, mainly due tothe almost three-fold increase in theshipments of woodcraft at 299.25%.Also, marine products exports gainedmore international market access asthe shipments of fish, shrimps, andprawns grew by 13.59%.


INTERNATIONALTRADE POLICYNEGOTIATION

While globalization continues todrive economies towards moreintegration, the Philippines is takinga pragmatic approach at themultilateral, regional and bilaterallevels to make sure that Philippineinterest is upheld. In the regionaland multilateral negotiations, DTIconsistently invoked the principle ofspecial and differential treatmentwhich provides flexibility fordeveloping countries through longertimeframes on implementation ofcommitments, limited scope andcoverage of commitments, moreexclusions with respect to sensitiveproducts and sectors and otherflexibilities to allow necessaryindustry adjustments andrestructuring.

· Association of SoutheastAsian Nations (ASEAN)12th ASEAN EconomicMinisters Retreat.This retreat in Maniladeliberated on the ASEANeconomic community. Theministers emphasized theimportance of coming upwith a comprehensiveroadmap for logisticservices which willnecessitate ASEAN to workon an integral approach offacilitating customsprocedures, transportationrequirements, andmanagement of supplychain.

2nd Consultative Meeting forASEAN Priority IntegrationSectors (COPS II).Held in Jakarta, Indonesia,COPS II reviewed theprogress of implementationof the horizontal andsector-specific measuresfor the 11 roadmaps forpriority integration. It alsosought to address problemsthat affect the coordinationand implementation ofmeasures and considerednew measures for Phase 2implementation includingthe new roadmap forlogistics services.

38th ASEAN EconomicMinisters (AEM) Meeting.Ministers informed theASEAN Eminent PersonsGroup of their desire toaccelerate ASEANintegration five years ahead

The intricate art oftrade negotiationsgo beyond the gliband the gift of gab.It is hard work,perseverance andcommitment.

Senior Undersecretary Thomas G. Aquino


TRADE FACILITATION

To further improve RP’scompetitiveness, DTI has pursuedmeasures designed to make thePhilippine business environmentmore conducive to exporters.

· National CompetitivenessSummit.To address the country’sglobal competitiveness, DTIand the private sectorconducted the NationalCompetitiveness Summit inOctober. The summitformulated action agendaon six areas ofcompetitiveness, i.e.,competitive humanresources, efficient publicand private sectormanagement, effectiveaccess to financing,improved transaction flowsand costs, seamlessinfrastructure and network,and energy cost-competitiveness and self-sufficiency. A NationalCompetitiveness Councilwas also established toorchestrate theimplementation of theaction agenda by helpingmobilize public-privatepartnership resources.

· Removal from US IntellectualProperty Rights (IPR)Priority Watchlist.The US delisted thePhilippines from its IPRpriority watchlist in view ofthe country’s substantiveprogress in enforcement.The Philippinesimplemented a special lawto stop illegal production ofpirated optical discs suchas CDs and DVDs bycontrolling the licensing ofraiding pirate optical discproduction facilities andretail stores selling piratedand counterfeit goods.With this development, thethreat of economicsanctions and possiblewithdrawal of voluntaryconcessions such as thoseunder the US GeneralizedSystem of Preferences (GSP)were averted.

· MOU on Cooperation inTrade in Textile and ApparelGoods.The US and the Philippinessigned a Memorandum ofUnderstanding (MOU) onCooperation in Trade in

of schedule given the toughcompetition for global tradeand investment flows.Originally, the ministersenvisioned the integrationby 2020. The Philippines,however, expressed that itwould have to approach thefaster schedule withguarded optimism andstressed that ASEAN’seconomic reform be carriedout with extreme caution toprevent disenfranchisementof domestic sectors.

· ASEAN-KoreaASEAN-Korea Free TradeArea (AKFTA) WorkingGroup on Rules of Origin.The DTI activelyparticipated in the 7th and8th ASEAN-Korea FTAWorking Group on Rules ofOrigin. The meetingfinalized the texts of therules of origin andoperational certificationprocedures (OCP). Also, anagreement was reached thatproduct specific rules(PSRs) under the AKFTA shallbe applied as exclusiverules. Agreement onconferment of originatingstatus was also reached onseveral products includinggarments and textiles.

ASEAN-Korea FTA TradeNegotiating Committee.ASEAN and Korea concludedits 10th, 11th and 12th TradeNegotiating Committee(TNC) meetings. Topicscovered included sensitivetrack list in the Trade inGoods (TIG) agreement,services and investmentagreements, and economiccooperation. All membercountries submitted theirrespective sensitive tracklists which strictly followedthe agreed caps andthresholds stipulated in theTIG agreement, except forGroup A (tariff reduction to50%) in the highly sensitivelist.

· ASEAN-India11th ASEAN-India TradeNegotiating Committee.India informed ASEAN that itwas able to secure mandateto sign the protocol toamend the frameworkagreement on thecomprehensive economiccooperation. However Indiawas still unyielding in itspositions on the modalities

for tariff reduction andelimination.

· ASEAN-Australia NewZealand5th ASEAN-Australia NewZealand Trade NegotiatingCommittee Meeting.Proposals on modality fortariff liberalization on TIGagreement was discussed.Draft chapter texts andelements for EconomicCooperation (EC), Sanitaryand PhytosanitaryMeasures (SPS), andCustoms Procedures werealso taken up while drafttext agreements on Trade inServices, Investments, Rulesof Origin, and DisputeSettlement Mechanism areup for deliberation at theworking group level.

· JapanJapan-Philippines EconomicPartnership Agreement(JPEPA).After four years ofnegotiation, Japan and thePhilippines signed theJapan-Philippines EconomicPartnership Agreement(JPEPA) in September 9,2006. The Philippinesnegotiated for an economicpartnership with Japan onthe basis of pronouncedcomplementarities betweenthe two countries and theimperative of attainingbilateral cover forPhilippine exports. Japan isthe Philippines’ secondlargest export market andthe main source of foreigndirect investments. ThePhilippines is expected togain from the agreementthrough market access foragricultural products andnon-discriminatorytreatment for Filipinooverseas professionalsproviding services in Japan.Agricultural products whichwill benefit from theagreement include bananas,pineapples, shrimps andcrabs, cane mollases andmuscovado sugar, chickenand tuna. Similarly,industries seen to benefitare iron and steel, auto andauto parts, electrical andelectronic appliances andtheir parts, and textiles andapparels. The agreementalso opened opportunitiesfor Filipino care workers towork in Japan.


exercise the EDC mandate ofimposing sanctions on anygovernment agency orofficer or employee thereof,or private sector entity thatimpedes efficientexportation of Philippinegoods.

· Elimination of export feesand charges.To reduce the cost andsimplify procedures onexport transactions withgovernment, ExecutiveOrder 554 was issued to alldepartments, bureaus,commissions, agencies andinstrumentalities, includinggovernment-owned and orcontrolled corporations toeliminate the fees andcharges imposed on exportclearances, inspections,permits, certificates andother documentationrequirements. The EO alsodispensed with allclearance requirements onall Philippine commodityexports except for thosethat are covered by quota,banned exports and thosecovered by internationalagreements.

· Exemption of Exporters fromTravel Tax (E.O 589).E.O. 589 exempts exporterswho join trade fairs,exhibitions, sellingmissions, negotiations,conferences and seminarsabroad, duly endorsed byDTI or Philexport, frompaying travel tax. Thisfurther lowers the cost ofdoing business of exporters.

Textile and Apparel Goodswhich will allow on-sitecustoms inspections tospeed up processing ofgarment exports to the US.This trade facilitationmeasure is expected to curbtransshipments and otherpossible violations.

· Lift on the Ban of AbacaTrading.The DTI successfullylobbied for the repeal ofExecutive Order 502 whichbanned the “Harvesting,Gathering, Buying, Sellingand Mutilating of Maturedand Young Leafsheaths ofAbaca Plants forCommercial Purposes.” Theban resulted in thedisruption in the supply ofraw materials used in theproduction of furniture,furnishing, and handicraftswhich caused losses toindustry stakeholders.

· Appointment of DTISecretary as Export Enforcer.Malacañang issuedAdministrative Order (AO)155 appointing the DTISecretary as ExportEnforcer. The AO empowersthe DTI Secretary to act inbehalf of the President ondecisions reached by theExport Development Council(EDC), implement measuresto lower the cost of doingbusiness for exporters, callon all government agenciesunder the executive branchto implement suchdecisions, report on suchimplementation and

TRADE PROMOTION

To promote Philippine products in theglobal market, DTI continued to conductand participate in trade exhibitstargeting priority markets identified inthe 2005-2007 Philippine ExportDevelopment Plan (PEDP).

· ASEAN.The Philippine participation toCommunicAsia generatedUS$6.21m. Philippinecompanies such as Globe andPhilippine Long DistanceTelephone Co. (PLDT) receivedcommendations. The countryalso participated in Thaifex(World of Food Asia), generatingUS$2.79m from negotiatedorders.

· China.Participation in the ChinaEducation Expo and the 3rd

China-ASEAN Expo generatedbusiness proposals from theChinese food importers such asthe shipments of up to US$3mworth of fresh mangoes andbananas and 20,000 kilos ofdried pineapples per month.Also, a Philippine virgin coconutoil manufacturer designated adistributor in Nanning fordistribution of its products inChina. Mineral products, i.e.,copper, iron, and lead ore, werein high demand considering theconstruction boom in Nanningand other Chinese provinces.

· Japan.Most of the DTI’s promotionalactivities zoomed in on Japan.Featured sectors were ICT-services, giftware, food andbeverage, furniture,construction, and health andwellness. Software developmentservices generated the mostnumber of inquiries at theSoftware and Development Expoand Conference (SODEC).Functionality, craftsmanship,and good design were thecountry’s selling points at theTokyo International Giftshow(TIG). And to take theopportunities in the emerginghealth and wellness sector, thePhilippines participated in the1st ASEAN Health and WellnessExhibition.

· USA.Promotions focused on organicand natural products and ICT-services. High interest in virgincoconut oil (VCO) wasmanifested at the NaturalProducts Expo West where a


TRADE REMEDYMEASURES

Trade remedy initiatives were set inplace to protect the local industryfrom unfair trade practices:

· Ceramic Tiles.A Department Order (DO) wasissued in January 2006imposing the amount of Php2.45/kg as the definitivesafeguard measure onceramic tiles

· Clear Float Glass.The DTI delisted India,Malaysia, Pakistan, andTaiwan from the list ofdeveloping countriesexempted from the definitivegeneral safeguard measureon clear float glass sincetheir exports to thePhilippines exceeded the 3%threshold

· Cement.Another DO was issued inMarch 2006 dismissing thepetition for extension of thedefinitve safeguard measuresfiled by the CementManufacturer’s Associationof the Philippines (CEMAP) inaccordance with the October2005 Supreme Courtdecision, which reaffirmedits July 2004 decision asfinal and executory

· Sodium Tripolyphospates-Technical Grade.Due to an increase in importsof Sodium Tripolyphospates-Technical Grade (STPP-TG)which caused serious injuryto the domestic industry,particularly in terms ofdeclining market share,domestic sales, capacityutilization, production,profitability, productivity,price suppression andundercutting, the DTIimposed a provisionalsafeguard measureamounting to P14.15/kg onall importations of STPP-TGfrom various countries. Thisprovisional safeguardmeasure was intended toprotect the local industryfrom incurring further injurywhile the case is underformal investigation by theTariff Commission (TC). Thecase was forwarded to the TCin July 2006.

VCO manufacturer bookedthree full container vansworth of orders. ACalifornia-based medicaltranscription companysignified its interest to visitthe Philippines for possibletie-up with local medicaltranscription providerswhile the ICT mission to theUS provided a venue topromote the Philippines inFlorida, a relatively newmarket for global sourcing.

· European Union (EU).The DTI promotedwearables, furniture,holiday décor, food andbeverage, and ICT. Thehighly successfulparticipation in SaloneInternazionale del Mobilegenerated negotiated salesof US$10.49million. As acountry strategy, Movement8 is gaining worldwiderecognition and receivedoffers for distributorship.Also, the functionality,creativity in design, andcolor combination ofPhilippine holiday décorproducts resulted inUS$2.61million worth ofexport sales in Germany’sChristmasWorldinternational selling fair.

· Taiwan.Focus was on food andelectronics sectors.Participation in the TaipeiInternational Food Showgenerated sales ofUS$2.597million. Similarly,product quality,functionality, highperformance andadaptability buoyed thecountry’s selling points in

SemiTech Taiwan 2006, asemiconductor exhibition.

Middle East.Quality and uniqueness oflocal products stamped thePhilippines’ firstparticipation in United ArabEmirates’ Big 5, the largestand most important annualmeeting place for thebuilding and constructionindustries in the MiddleEast. Showcased sectorsincluded furniture,construction, and food.Some US$457,400 innegotiated orders and US$6.67million worth of saleswere generated in INDEXDubai 2006. In foodpromotion, DTI conductedthe IFEX Roadshow andFood Business Missioncovering Dubai, Qatar,Kuwait and Bahrain. TheDTI also facilitated the statevisit of President Arroyo tothe Kingdom of SaudiArabia (KSA) where aMemorandum ofUnderstanding on BilateralTrade and InvestmentCooperation was signed.

· Halal.One of the culture-basedmarkets that DTI continuedto promote is Halal. In2006, the UAE GeneralSecretariat ofMunicipalities accreditedthe Islamic Da’wah Councilas certifier ofmanufacturing facilities ofbeef, goat, and poultryproducts in the Philippines.The DTI conducted a halalfamiliarization visit toBrunei to familiarize thePhilippines with halal bestpractices and standards.


With its Business DevelopmentProgram, the DTI continued tosupport priority industriesidentified in the 2004-2010 MTPDPfor both investments and exports.

MININGPhilippine Standard Code for PublicReporting of Mineral Exploration.Together with the Chamber of Minesof the Philippines, the DTI identified“clean titles” mining projects.Projects are considered “cleantitles” when they satisfy thefollowing criteria: 1) no adverseclaims; 2) no conflict with LGUs,NGOs, and indigenous peoples; and3) no intracorporate rifts andpending legal cases. The 24 prioritymining projects were classified andranked according to these criteria.

The “Formulation of the PhilippineStandard Code for Public Reportingof Mineral Exploration, Mineral andEnergy Resources and Ore Reserves,”a project of the Mineral ProductsBusiness Development Team, aimsto formulate a Philippine standardcode for public reporting of mineralexploration, mineral and energyresources and ore reserves inconsonance with Philippine andinternational standards and a“Competent Person” accreditationsystem. The proposed code shallcover metallic and industrialminerals and energy resources andwill be similar to the AustralianJoint Ore Reserves Committee (JORC),which is a globally acceptedstandard in mineral resourcereporting.

Investors’ Manual for the MineralIndustry.The BOI, in cooperation with theMinerals Development Council(MDC), initiated the drafting of theInvestors’ Manual for the mineralindustry. The manual will provideinvestors with salient informationon Philippine mineral resources,mining rights and the correspondingfiscal and non-fiscal incentivesavailable to investors.

MOTOR VEHICLESThe 5th Auto Supporting IndustriesConference and Fair held in Bangkok,Thailand on 23-25 March 2006focused on nurturing the automotive-related supporting industries in theASEAN region, expanding localprocurement of parts by Japanese-affiliated automobile, parts andcomponents manufacturers, andenhancing investment and technologyexchanges between motor vehiclesmanufacturers and parts, andcomponents suppliers.

Export Development Seminar for SMEParts and Components Manufacturers.The seminar-workshop “ProvidingKnowledge and Networks for Movinginto Exporting Efficiently waslaunched to help develop thePhilippines as an export base ofmotor vehicle parts and components.The event encouraged companies toparticipate in future internationaltrade shows for auto parts andcomponents.

Also, a selling mission for auto partsheld in October 2006 in Shanghai andBeijing was participated in by ninefirms namely, Aries Technologies, Inc.,Kyoie-Kogyo (Phils.) Corp., ValerieProducts Manufacturing Corp., SanohFulton, Centro Manufacturing Corp.,MD Juan Enterprises, Inc., and WorksBells Phils. Inc. Visited companieswere Beiqi Foton Motors CompanyLtd.,Beijing Automotive WorksCompnay Ltd., Hebei ZhongxingAutomobile Company Ltd., BaodingDADI Automotive Industry Company,Shanghai Maple Automobile CompanyLtd., and 6) Zhongda (China) Group.

BUSINESSDEVELOPMENTPROGRAM

smaertSeuneveRPDB

smaertSeuneveRtnempoleveDssenisuB

reganaM

dnadooFdessecorP

,laicremmoC(segareveB

)rehsoKdnalalaH

.GEIRAMESOR

)PTEB(OLLITSAC

gniviLdnaelytsemoH

,stfiG,gnihsinruFemoH(

yadiloHdnaerawesuoH

)rocéD

.OATIRAIRAM

)METIC(ETUTAM

dnalabreH,cinagrO

stcudorPlarutaN

OTNEIMRASEILRIG

)METIC(

,stnemraG(noihsaF

)ngiseDdnaseirosseccA

SALNAC.GDNANIDREF

)PTEB(

,slairetaMnoitcurtsnoC

gnitlusnoCgnireenignE

gnitcartnoCdna

secivreS

ALLIVAEDLAV.TAINOS

)PAIC(

scinortcelENATAGAC.METSIRAVE

)IOB(

secivreSTCIOLLIRACETTENAEJ

)IOB(

dooF(stcudorPeniraM

)dooF-noNdna

NIUGAME.EODAMA

)IOB(

,straP(elciheVrotoM

dnaseirosseccA

)ylbmessA

)IOB(SELASORNOMAR

secivreSscitsigoLETNECIVORDEP

)BSP(AZODNEM

apS(ssenlleW&htlaeH

dnatnempoleveD

)tnemeriteR

)IOB(ANAC.BYDUR

stcudorPlareniMMUNADNIUQALLIG

)IOB(


A benchmarking mission was organizedfor DTI-Cebu Office to orient its personnelwith the Philippine Automotive Industry.Plant visits and company briefings wereconducted in Honda Cars Philippines. Inc.(passenger cars and commercialvehicles), Pilipinas Hino, Inc. (buses),Kawasaki Motors (Phils.) Corporation(motorcycles), and Kyoei-Kogyo Phils.Corp., and Sanoh-Fulton Philippines, Inc.(automotive parts and components). TheDTI-Cebu Office has been promoting themetal and plastic parts manufacturingsub sectors.

ELECTRONICS6th and 7th ASEAN Electronics Fora.The 6th and 7th ASEAN Electronics Forum(AEF) were organized, focusing onspecific integration roadmap measuresnecessary for the development andintegration of the electronics industry inthe ASEAN region. Delegates from ASEANmember-countries such as Cambodia,Indonesia, Lao PDR, Myanmar,Singapore, and Thailand attended theevent. Projects resulting from these foraincluded the the 1st ASEAN Reverse TradeFair dubbed as the ASEAN ElectronicsBusiness Opportunities Exhibition andConference (AE-BOEC) held in December2006 in Makati City, and the BusinessLeaders Meeting in Cebu City. AE-BOEChad three major components, i.e.,reverse trade fair, investments pavilion,and business opportunities conference-procurement seminar.

As a result, three firms (First Sumiden,Sharp Philippines, and Fastech Synergy)reported an initial annual purchaseamounting to Php240million. An averageof six business matching per exhibitorwere conducted from negotiations with 20exhibitors and six investment promotionagencies. In addition, the ASEAN ElectronicsDirectory was completed, containing alisting of electronics and electroniccompanies in Indonesia, Malaysia,Philippines, Thailand, Singapore andVietnam.

ASEAN Electronics Business Opportuni-ties Exhibition and Conference.The Philippines, being the CountryCoordinator for the Priority IntegrationProgram (PIP) for Electronics, organizedthe ASEAN Electronics BusinessOpportunities Exhibition and Conference(AEBOEC), as spearheaded by BOI andCITEM. Among the positive results, theconference brought the top electronicsfirms in sync in procurement programsharing and displayed the strongpotential of Philippine electronicsfirms.

RP’s First Participation to SemitechTaipei 2006.BOI and CITEM organized the country’sfirst participation to Semitech Taipei2006 held in Taipei World Centre. TheBOI-CITEM team made the development


NDC ISSUANCE OF AA

BONDS TO PUMP-PRIME

THE ECONOMY

In 2006, the NationalDevelopment Company(NDC) was mandated toparticipate in thegovernment’s pump-primingactivities by issuing NDCAgri-Agra (AA) Bonds. EO 530was issued on May 24, 2006which strengthened NDC’sauthority to issue bondsunder EO 83 Series of 1998and expanded the use ofbond proceeds to includethe economic pump-primingactivities of government-owned and controlledcorporations (GOCCs) andother projects designed foreconomic growth andpoverty alleviation.

On 19 July 2006, NDC issuedP2 Billion worth of AA Bondsfetching a coupon rate of5.875%, the lowest in itsseries of debt papers, theproceeds of which was lentto the National IrrigationAdministration (NIA). Theloan facility was used tojumpstart the rehabilitationof NIA’s irrigation systems.

FOCUSHEALTH ANDWELLNESS/MEDICALTOURISMIn partnership with the Public-PrivateTask Force for the Development ofGlobally Competitive Philippine ServiceIndustries (PPP), the DTI sought toharmonize initiatives of the private andpublic sectors toward setting a commonvision and formulating a nationalstrategic framework for the health andwellness sector.

The DTI facilitated consultation meetingswith major industry players that led tothe clustering of the sector into medicalservices, wellness, and retirement. Themedical cluster held a strategicworkshop in February at the AsianInstitute of Management (AIM) to identifymarkets for medical services and thegaps and issues in the development ofthe sector. In the early part of 2006, theMedical Cluster launched the medicaltourism program showcasing thecountry’s world class hospitals andspecialized clinics.

Projects in the pipeline:• Health Spa – a Php12.5 million project

to be located in Cagayan de Oro, togenerate 85 new jobs

• Amherst Laboratory Inc. - a subsidiaryof Unilab with project cost of PhP1.7billion and expected to start operationbetween 2007 and 2008 and employ235

• Philippine Movement Disorder Surgery– an Php8.1 million hospital-basedspecialized center in Cardinal SantosHospital which is expected to operatein January 2007

wide range of products such aselectronic design automation tools,equipment, components andmaterials and IC design, manufacturing,packaging and testing.

Seven companies participated in theevent namely, Symphony Consulting,Blue Chips Designs, Inc., EAZIX, PSITechnologies, Fastech Synergy, e-DesignTechnologies and Circuit Solutions. Inaddition, participants who passedthe training conducted by Taiwan atthe University of the Philippines,Diliman in December 2005 werepresented during the exhibition forpossible employment matching orbusiness outsourcing opportunities.

Second IC Design Training.Two more courses were provided byTaiwan to the Philippines, i.e,Analysis of Mixed Signal IC Layoutand Analog Integrated Circuits whichare part of the whole IC designtraining. Participants were 10graduating students from theUniversity of the Philippines (UP),three faculty members from MapuaInstitute of Technology (MIT), twofrom De La Salle University (DLSU),and two from the University of SanCarlos (USC), and three privatepractitioners from Blue Chip,Symphony Consulting and NXP(formerly Philips Semiconductors).All participants passed the examinationgiven by the Taiwanese professors atthe end of the training program.The Taiwanese professors wereimpressed with Filipino engineers,finding them to be fast learnersand among the best they haveencountered.

of integrated circuit (IC) design as itsthrust in entering the global supplychain for electronics. Objectives ofthe Philippine participation were tostrengthen the cooperation betweenthe Philippine and Taiwaneseelectronics industries, build upbusiness network with Taiwanesecompanies involved in IC design,create awareness and marketexposure of Philippine capabilitiesin IC design and other services, andupdate the local industry on theglobal market trends and technologydevelopments. The show covered a


Data Protection Guidelines.DTI Secretary Peter B. Favila signedDepartment Administrative Order No.08 Series of 2006 prescribing the“Guidelines for the Protection ofPersonal Data in Information andCommunications Technology in thePrivate Sector.” The objective aims toencourage and provide support toprivate entities to adopt privacypolicies for the protection ofpersonal data in information andcommunications system inconnection with the e-Commerce Act.A draft bill for data privacy was filedat the Office of Senator ManuelRoxas II for sponsorship at theSenate.

NASSCOM Visit to Manila.The Business Process Association ofthe Philippines (BPAP), with the helpof ICT-BDT, hosted a high-leveldelegation from the NationalAssociation of Software and ServiceCompanies (NASSCOM) of India inSeptember 2006. The three-dayconference was intended to come upwith a formal agreement forcollaboration between the twoorganizations. The NASSCOMdelegation consisted of 15NASSCOM officials and executivesfrom tier-one BPO firms withoperations in India.

“Making-Your- Medical TranscriptionBusiness Work” Forum.The Medical Transcription IndustryAssociation of the Phils., Inc.(MTIAPI), in cooperation with DTI,organized this one-day forum whichdiscussed the processes on how toequip new local medicaltranscription players with bestpractices and requirements of theUS. The participants formulatedindustry policies that will serve asguidelines in observing businessethics.

Launching of Philippine AnimationFilm Festival.This event recognized the potentialof Philippine animation companiesby harnessing digital competencyamong creative and visual artists in

• Pharmawealth Laboratories, Inc. – toinvest Php95.055 million for themanufacture of an anti-biotic(cephalosporin) and to startcommercial operations by January2009

• Professional Services, Inc.- to investPhp446.175 million for the expansionof tertiary care hospitals (MedicalCity) and is expected to operate inJuly 2007 and generate 55 additionaljobs

ICT SERVICESManagement & EntrepreneurshipCapability Enhancement for theAnimation Industry.The ICT Business Development Team,together with the Animation Council ofthe Philippines, commissioned AIM toconduct the “Management &Entrepreneurship CapabilityEnhancement Program for theAnimation Industry” to improve themanagement and business planningskills of participating animation SMEmanagers and owners. The programprovided 17 managers and ownersfrom 13 companies with six days ofintensive lecture, workshop andpracticum on enterprise positioning,organizational architecture, strategyformulation, values and attitudes,organizational building and nurturing,among others.

eServices 2006: 6th OutsourcingConference & Exhibit.To promote the five identified bannerniches of the e-services sector namely,animation, business processesoutsourcing (BPO), data transcription,software development, engineering,design services, and network security,e-Services Philippines: 6th OutsourcingConference and Exhibition was held.The event generated US$20.74 millionin sales brought about by the rise in co-location contracts entered into byforeign buyers. The two-day exhibitdrew 163 exhibitors and was attendedby 1,678 trade visitors and conferenceattendees. DTI Region 9’s participationresulted, among others, in the forgingof alliance between G-Com, asubsidiary of Cybercity, with localuniversities for a training program onEnglish proficiency.

Software Innovations Philippines 2006,8-10 May 2006 (Shangri-la Hotel,Makati).With Microsoft Philippines as the mainorganizer and sponsor, the ICT-BusinessDevelopment Team launched theSoftware Innovations Philippines (SIP):Conference and Exhibit – thePhilippines’ biggest software event.Nine foreign speakers from majorcountries (US, UK, Japan, Germany,Singapore and Australia) presentedtheir respective countries’ ITrequirements and opportunities.

the country. The Animation Council of thePhilippines, Inc (ACPI) aims to make thePhilippines a destination of choice inglobal animation outsourcing and topromote original content production fordomestic and international markets.

ICT Initiatives in the countryside.· Region 3.Sutherland Global Services, a contactcenter from India, launched a job fairfor prospective customer servicerepresentative (CSR) agents andtechnical staff. Sutherland signed acontract with Berthaphil, an ICTindustrial park within Clark SpecialEconomic Zone (CSEZ).

· Region 8.A six-hectare ICT park declared asPEZA economic zone was launched inMay 2006. The event highlighted theopening of the first locator, theCoredata, Inc, a processing companywith 138 seats. Major activitiesincluded the Trainers Training on CallCenter Course, e-Commerce Trainingfor SME II, Teletech Call Center JobFair II, Seminar on ScINET IntegratedLibrary Management System,Bayanihan Linus and Open OfficeTrainers Training, and ICT Fiesta Expo2006 Night.

· Region 10.The City Government of Cagayan deOro participated in the e-ServicesPhilippines (ESP) 2006: 6thOutsourcing Conference Fair 2006held in Mandaluyong City. A numberof companies and investors signifiedinterest in the city’s capabilities asan information technology (IT) hub.City Ordinance 5554-96 was signedproviding incentives to ICT industry-related investments. All IToutsourcing businesses, voice andnon-voice, but not limited tobusiness process outsourcing andknowledge process outsourcing, andinvestments in telecommunicationinfrastructures are given variousincentives like exemption from realproperty tax. Likewise, the IliganInformation and CommunicationTechnology and E-Commerce Council(IICTECC) conducted the 1st ICT


ORGANIC ANDNATURALPRODUCTS

The Natural Products Expo West 2006(NPEW) held at the Anaheim ConventionCenter in the US showcased naturalfood supplements and personal careproducts. The event generatedUS$15.96million in sales, with virgincoconut oil (VCO) as the bestseller.

LOGISTICS

The development of the PhilippineShipping and Transport LogisticsInformation Center, a web-basedone-stop action center that willprovide current and accurateshipping and logistics informationto shippers and investors, wasproposed. It was envisioned to be acomprehensive source of real-timeinformation on shipping.

The Northern Mindanao Shippers’Association (NORMINSA) wasgranted a PhP1million grant by theWorld Bank to help ease the cost ofshipping in Mindanao. Cargopooling cuts the cost of domesticcargo freight by as much as 50%through combining the cargovolumes of various small shippersin one port and offering them toshipping lines through competitivebidding. The project benefited some300 small and medium scaleshippers in Mindanao. Close tie-upsbetween government agencies suchas the Bureau of Domestic Trade(BDT) and Bureau of Export TradePromotion (BETP) were pursued tointegrate efforts related with supplychain and logistics.

CONSTRUCTION

The business development managers(BDM) for construction and thePhilippine Overseas ConstructionBoard (POCB) participated in the11th World Building and ConstructionExhibition (Worldbex 2006) and inthe 16th Philconstruct 2006 at the

World Trade Center. Differentconstruction materials as well as thecapabilities of local contractors andengineering consultants wereshowcased.

Also, the BDT organized a briefingsession for the Hong Kong ConstructionMission. Discussed were prospectsin construction, laws and proceduresgoverning the construction activitiesof foreign contractors, state of thePhilippines construction industry,and environmental issues andconstruction services.

FOOD

MSME-related investment projectswere carried out under the BangkoSentral ng Pilipinas-funded IntegratedProgram for Micro SME foodmanufacturers:

• Forged a memorandum ofagreement (MOA) with PTTCfor the implementation of thecapacity building componentof the Integrated Program forMSME Food Processors.• Partnered with PTTC for theconduct of informationsessions (modules 1 & 2) toten DTI regional and provincialoffices. Module 1 focused increating awareness on thesignificance of food safetyand the basic requirements offood processing plants suchas Standard Sanitary OperatingProcedures (SSOP), BasicGood Manufacturing Practices(GMP), Hazard AnalysisCritical Control Point (HACCP),

Forum and Exhibits with thetheme “Utilizing ICT for Tradeand Tourism”.

· Region 11.Seven Davao-based e-Servicecompanies participated in ESP,the only IT outsourcingconference and exhibitionorganized by CITEM.

· Region 12.The ICT Solutions Association ofRegion 12 (ISA12) SaranganiChapter was organized. The DTIand VMC College conducted anAppreciation Seminar onMedical Transcription at VMCCity College, Tacurong City. OtherICT-related activities included anICT walk tour in Manila,launching of the 6th OutsourcingConference and Exhibit, briefingson ICT investment policies byMakati-LGU and BOI-Manila andon ICT park at Eastwood, Q.C.,and business matching betweenInfo Activ IT and EngineeringSolutions.


and market trends and requirements.Module 2 zeroed in on businessplan preparation, advanced GMP,HACCP Principles and HACCP planpreparation and basic principle ofcosting and pricing. A total of 689participated in both modules.• Forged a MOA with CITEM for theInternational Food ExhibitionPhilippines (IFEX) Pavilion forcompliant participants of theIntegrated Processed FoodMicro-Small (IPMS) and mediumcompanies.• Twenty-two out of the 213participating companies in the 2ndmodule of the IPMS were selectedto promote their respectiveproducts and services during theIFEX 2006 held at the World TradeCentre in May 2006. SomePhp15.3million in sales weregenerated at the exhibition areaand Php4.1million at the retailarea.

The IPMS assisted MSMEs in thefood-processing sector in the areas ofproduction, processing, packaging,capability building, marketing and

promotions. It facilitated, amongothers, the dissemination of thedirectives on Regulation Commission(EC) No. 1895/2005 on the use ofcertain epoxy derivatives (believedas toxic when in contact withfoodstuffs) in materials andarticles intended to come intocontact with food. Also, the 1stinter-agency meeting on ExecutiveOrder 201 directing the DTI to leadin the harmonization of the PhilippineHalal Program was organized.Notably, an IFEX symposiumentitled “The Global Food Safetyand Regulatory Compliance MarketAccess Strategy to China and Korea”was launched, which was attendedby 68 participants from the foodindustry, government, and academe.

Defense Commissary Agency (DeCA)and Food Selling Mission to the US.As an offshoot of trade leads fromthe two previous missions in 2002and 2004, the Defense CommissaryAgency (DeCA) and Food SellingMission to the US was organized.Ten manufacturers, exporters andconsolidators joined the Philippine


food delegation. Twenty-sevenbuyers from New York, Chicago, SanFrancisco and Los Angeles attendedthe mission. Sales generated basedon partial report of booked salesreached US$1.1million.

HOMESTYLE ANDLIVING

The Philippine participation toChristmasworld International TradeFair in Frankfurt, Germany generatedsales amounting to US$2.61million.Top grossing Philippine productshighlighted functionality, creativity,and color combination.

Another major event was the ManilaFashion Accessories ManufacturersExporters (FAME) International heldin April 2006 at the World TradeCenter, which showcased 458 SMEsfrom the furniture, home furnishings,holiday décor, and fashionaccessories sector. Some 2,759 tradebuyers visited the event, includingforeign buyers from US, Europe,Canada, Australia, and Hong Kong.Best selling products were decorativevases, costume jewelry, living roomfurniture, pots, candleholders,holiday decorations, placemats,functional and decorative baskets,artworks, and lamps.

Moreover, the “Manila Now” sellingfair held in PTTC drew 775 foreignbuyers from 69 countries, 795 localtrade buyers and 797 paying visitors.Rattan products topped the sellingchart. Participating companies wereDesign Alchemy, Designs Ligna, GaraDesigns, Lightworks Resources Inc.,Locsin International, Maze Mfg.Corp., More Than A Chair Inc., TheGilded Expressions, and The JulianneCollection.

MARINE

The 3rd Tilapia Congress and FiestaTilapia 2006 was launched at theWOW Philippines Hilaga in SanFernando City, Pampanga, focusingon tapping more tilapiastakeholders in the country. Withthe theme “Building a SustainableIndustry”, the three-day eventdiscussed major concerns of thetilapia industry such as challengesand opportunities, production,breeding, product development,and marketing.

The National Agricultural andFishery Council composed ofrepresentatives from Bureau ofFisheries, Philippine Council for

FASHION

The country participated in differentinternational fairs:

PDDCP and Trendease Internationalconducted trend briefings under theDesign and Market Updating Program(DMUP) for the costume jewelry andfootwear industry. It was attended by37 participants, mostly in-housedesigners and sample makers of CebuFAME member-companies. Moreseminars were conducted forfurniture and home furnishingsmanufacturers in Cebu andPampanga and on holiday decors inMetro Manila.

riaF euneVtcudorP

sucoFnI(selaS

)$SU

gnirpSfecaM

riaFylatI

emutsoC

,yrlewej

noihsaf

,seirossecca

sgab

M4.1

1orOazneciV ylatI yrlewejeniF 058,696

cificaPaisA

riaFrehtaeLgnoKgnoH

dnarehtaeL

noihsaf

sgab

000,006

gnoKgnoH

riaFyrleweJgnoKgnoH yrlewejeniF 003,84

Acquatic and Marine Research andDevelopment (PCAMRD), DENR, Bureau ofAnimal Industry (BAI), Tambuyog(a non-governmental organization), andDTI met and discussed several issues:

· guidelines on grant of coastalarea special use agreement;

· WTO negotiations in NonAgricultural Market Access(NAMA) and fisheries subsidies

· status of accreditation of fishponds for experimental fieldtrial of L. vannamei (whiteshrimp)

· status of standardsdevelopment projects for fishand fishery products

During the annual International FoodExhibition (IFEX) Philippines 2006, theBDT for the marine sector assisted 14companies, eight of which were SMEs.Showcased products during the three-dayevent included assorted dried fish,smoked mackerel and alumahan, bottledtahong, tinapa, sardines, calamaressteaks, bangus sisig and other milkfishproducts, live grouper and other seafoodproducts. Local sales amounted to Php97,680 while export sales reachedUS$24,336. Exhibitors had negotiatedsales with Australia and Londonamounting to US$35,000 and US$32,000,respectively.


INDUSTRY DEVELOPMENTAND INVESTMENTGENERATION, PROMOTIONAND FACILITATIONSERVICES

INVESTMENTAPPROVALS

In 2006, the Board of Investments(BOI) and the Philippine EconomicZone Authority (PEZA) approved atotal of Php271.29 billion worth ofinvestments. The 696 projectsregistered are expected to generate130,376 jobs. Local investorsremained the key source ofinvestments with committedinvestments worth Php 182.74billion (67.35% of total investments)while foreign investors accounted forPhp 88.55 billion, or 32.65% of totalinvestments.

Investments in infrastructure andindustrial service facilities reached

Php 96.72 billion, an increase of1,648.89% compared to the sameperiod last year. Real estate, rentingand business activities sector grewby 113.80% to Php 29.98B in 2006from Php 14.02 billion recorded in2005. The IT Services sector alsoposted a remarkable increase of39.26% to Php12.27 billion.

2006 Investments Priority Plan (IPP).With the theme “Propelling theNation to 1st World Status in 20Years,” the 2006 Investments PriorityPlan (IPP) covered 11 investmentareas as identified in the MediumTerm Philippine Development Plan(MTPDP) 2004-2010. Three newpriority areas were included in the2006 IPP:

· Projects under the Retention,Expansion, and Diversification(R.E.D.) program to encourageexisting investors to retain theirinvestments in the country aswell as expand and diversifytheir interest

· Relocation activities orinvestments from othercountries that would transfertheir production or servicefacilities into the Philippines

· Production of machinery andequipment, raw materials, andintermediate inputs in supportof the activities listed in the IPPto improve the supply chain oflisted activities.


INVESTMENTPROMOTIONOutbound missions to India, Japan,China, Taiwan, Europe, and the USwere launched to support thecountry’s bid as a preferredoutsourcing destination especiallyfor American and Europeancompanies. Key objectives in thosevisits were to sustain the promotionof the country’s IT and IT-enabledservices and enhance the countrybrand image, expand DTI’s supportnetwork in promoting investmentopportunities in the Philippines, andestablish new linkages with relatedorganizations for image building andinvestment generation. The missionsresulted in at least nine confirmedinvestment prospects, 20new investment leads,and 10 companiesexpressing investmentinterest.

The BOI alsoorganized visitprograms andassisted a total of94 inboundmissions. Thesewere visits ofindividuals or

delegations to the Philippines to explore various business investment interests inthe country. BOI provided comprehensive service to these missions which includevisit research, counseling, and information support to facilitate the companies’investment missions. Through the One Stop Action Center, 915 walk-in clients wereassisted and 932 phone inquiries attended concerning the processes in doingbusiness in the country. A total of 148 companies interested in investing in thecountry were assisted.

To spur investments in the countryside, domestic roadshows in Davao City, Isabela,Cagayan de Oro, Baguio City, Cagayan North, Caraga (Butuan City), Region 9(Zamboanga City), and Region 6 (Iloilo City and Kalibo) were conducted. As a result,some 84 investments leads were generated with a prospective investment of Php74.14 billion.

Capability building sessions on investment promotions were carried out to improvethe competency of local government units (LGUs) in promoting their areas asinvestment destinations. The training programs were conducted for LGU executives,line-agency and private sector representatives of Cordillera Administrative Region,Ilocos Sur, Legazpi City, Marikina City, and Rizal.

POLICY ADVOCACY

BOI actively participated in various fora such as the World TradeOrganization (WTO), Asia Pacific Economic Cooperation (APEC),

Association of Southeast Asian Nations (ASEAN) as well as ASEAN’snegotiations with its dialogue partners like Japan, China, Korea,Australia, New Zealand, and India. Notably, the Japan-PhilippinesEconomic Partnership Agreement (JPEPA) was reached with Japan.Consultations with private sector representatives and otherstakeholders, through the institutionalization of the Joint

Consultative Committee on the WTO Non-Agriculture Market Access(JCC-NAMA), were held to firm up the government’s negotiating stance

on the various NAMA issues raised at the WTO NAMA NegotiatingGroup Meetings in Geneva.

MANAGING THE ENVIRONMENTPartnerships with the United Nations Development Program (UNDP),

Japan External Trade Organization (JETRO) and Japan InternationalCooperation Agency (JICA) were carried out to boost the national

efforts to achieving sustainable environmental development.Foreign-assisted projects for the environment such as the

Environment and Natural Resources Capacity and

The wheels oftrade and industry

spin with theignition of

investments. TheHerculean task isto fuel the fire toentice business

warriors to investin the country.

BOI and PEZA Approved Investments

January – December 2006 vs. January – December 2005

smriFtsoCtcejorP

)MPhP(

.oC.dtLrewoPNG 00.309,34

.cnI,snoitacinummoCtramS 00.871,33

.proCreppoCnemraC 82.574,21

.proCtnemeCnretseWhtuoS 03.831,21

.proCtnemeCelgaE 89.037,6

6002 5002 etaR%htworG

tnemtsevnIlatoT

)BPhP(92.172 30.132 24.71

stcejorpfo.onlatoT 696 806 74.41

tnemyolpmE 673,031 141,811 63.01

Top Investment Projects

Undersecretary Elmer C. Hernandez


The NLEE project is the

construction of the 84.2-

kilometer toll road

starting at the

Department of Public

Works and Highways

(DPWH) Plaridel by-pass

(Burol Interchange in

North Luzon Expressway

(NLEX) up to Cabanatuan.

The North-South Toll

Road project involves

the construction of a12-

km road parallel to the

Aguinaldo Highway from

Coastal connecting to

Molino Boulevard.

stcejorPdesoporP UGL/ycnegAgnitnemelpmI

liaJdetargetnIalinaMorteM

tnemeganaM

dnatnemeganaMliaJfouaeruB-GLID

ygoloneP

ytilicaFnoitabucnIssenisuBhcetoiB AD/noitaroproCssenisuB-irgAlanoitaN

tnempoleveDytreporPsenaudnataCtnemnrevoGlaicnivorP

)CGP(senaudnataCfo

lanimreTnoinUaL,odnanreFnaS odnanreFnaSfotnemnrevoGytiC

frahWs'namrehsiF ytiCeuqanaraP

tnempoleveDytreporPsabayaT UGLsabayaT

nretseWehtfognidliuBeraCecipsoH

retneClacideMsayasiVHOD

tnempoleveDretneClacideMInoigeRInoigeR-HOD

)CM1R(retneClacideM

tnempoleveDytreporPoliolI

retneCTIdnanoitnevnoColiolI.a

dnaretneClarutluColiolI.b

yrotimroD/letsoH

retneClaicremmoC/tnemnrevoGoliolI.c

oliolIfotnemnrevoGlaicnivorP

tcejorPlatroPAEOPtnemyolpmEsaesrevOenippilihP

)AEOP(noitartsinimdA

tcejorPTIytiCsotnaSlareneG sotnaSlareneGfotnemnrevoGytiC

Operations Enhancement (ENR-CORE)Program, particularly the “PrivateSector Capacity Building on Energy,ENR Management andEnvironmentally-Sound Technologies,”the Green Aid Plan (GAP) Program, andthe Study on Recycling IndustryDevelopment in the Philippines. Theseprograms are designed to assist localindustries, especially the SMEs, inenhancing their globalcompetitiveness through the effectiveuse of environmental managementtools.

INFRASTRUCTURE

Recognizing the need for moderninfrastructure as a crucial componentof improving the industries’competitiveness by reducing their costof doing business, the Build-Operate-Transfer (BOT) Center, the NationalDevelopment Company (NDC), and theNDC-Philippine InfrastructureCorporation (PIC) continued toaddress investor concerns oninfrastructure facilities in the country.Priority projects involved five tollroads and one airport in support ofPresident Gloria Macapagal-Arroyo’s10-point agenda.

· South Luzon Expressway(SLEX). Advanced work wasdone along San Pedro,Laguna. This project wouldhave a significant impact onthe socio-economic growthin the CALABARZON(Calamba-Laguna-Batangas-Rizal-Quezon) area byfacilitating the movement ofbasic commodities andservices between MetroManila and the region. PICand NDC assisted thePhilippine NationalConstruction Corporation(PNCC) in fast tracking theimplementation of theproject.

· CALA North-SouthExpressway.The project is expected toease the traffic along theAguinaldo intersection andimprove access to theindustrial estates in Cavite.

· ASDI Daang Hari/SLEX Project.The project will connect theexisting Daang Hari in Caviteto SLEX near the SusanaHeights Interchange and theproposed C6 LakeshoreExpressway.


· MWSS – 300 MLD TreatedBulk Water Supply Project.The project is designed toalleviate the water shortagein the southern part of theWest Concession Area withthe additional supply of300 million liters per day oftreated water.

· Metro Cebu Water District(MCWD) – Carmen BulkWater Supply Project.Some 46,000 cubic metersof treated water, under a 40-year build-own-operate-transfer arrangement, willbe delivered to MCWD.

Other BOT Programs.The BOT Center provided financialand technical assistance to thefollowing projects:

· Philpost ICT/E-CommerceProject. BOT Center assistedthe Philippine PostalCorporation (PPC) inevaluating the revisedtechnical and financialproposal on applicationdevelopment, hardware andsoftware installation andconnectivity amongPhilpost offices and theintroduction of newservices such as hybridmail system, digital cardissuance, and voice overinternet protocol (VOIP).

· North Luzon East Expressway(NLEE) Project.It involves the development ofthe NLEE Project along the PanPhilippine Highway (PPH)between Guiguinto, Bulacanand Cabanatuan City, NuevaEcija to improve domestictrade between Metro Manilaand Cagayan Valley-CentralLuzon.

· C6 Lakeshore Expressway.PIC, in coordination with theDPWH, NDC and PNCC isdeveloping the C6 LakeshoreExpressway, which is expectedto divert a significant amountof traffic off the main roads ofMetro Manila such as EDSAand C5 and would benefitmotorists in the east zoneparticularly those residing in

Marikina, Taguig, Pasig, Taytay,Angono, and Antipolo.

· Laguindingan and MindanaoAirports Development Project.In support of the developmentplan for Mindanao, PICworked closely with concernedagencies to facilitate theimplementation of theLaguindingan and MindanaoAirports Development Projectunder a Build-Operate-Transfer/Private SectorParticipation (BOT/PSP)scheme.

· Social Security System (SSS)Corporate Center Project.The project involvesdevelopment of the 4.45-hectare SSS property in EastAvenue, including theconstruction of aninfrastructure complex thatcombines office, retail,residential, andrecreational areas.

PRIVATE-PUBLICPARTNERSHIP

The Public-Private Task Force for theDevelopment of Globally CompetitivePhilippine Service Industriesdeveloped the private sector-led andgovernment-enabled strategicframework and national policies for

the continued development of threepriority sectors, i.e., health andwellness, information technology(IT)-enabled services, and logisticsservice sectors.


FINANCING

SULONG.In 2006, SME Unified LendingOpportunities for National Growth(SULONG) loan releases amounted toPhp32.41 billion, up by 2.56% fromPhp31.60 billion in 2005. Thefinancial assistance benefited 14,284micro small and medium enterprises(MSMEs) and generated 405,071jobs.

SME Financing Support Program.To further boost enterprise financing,DTI launched the SME FinancingSupport Program. It was funded byGTZ, a German-based internationalcooperation enterprise for sustainabledevelopment with worldwideoperations, and implemented by SMEDevelopment for SustainableEmployment Program (SMEDSEP).Through partner institutions composedof 48 rural banks and two thriftbanks in Cebu, Leyte, and Negros, thefinancing program had a total loanportfolio of Php914.7million andserved over 50,000 MSMEs.Composed of two thrift banks andnine rural banks, fully operationaland streamlined SME finance unitswere established in 11 anchor banksin 2006. The SME finance unitsstreamlined SME finance proceduresand trained bank executives and loanappraisers.

Small Business Corporation (SB Corp.)SB Corp. exceeded its target growthrate for 2006 by releasing Php3.94billion worth of loans for all itsprograms, up by 21% from last year’sPhp3.2 billion. SB Corp. started usingthe Borrower Risk Rating (BRR) creditscoring system developed by AsianDevelopment Bank (ADB) consultantsin assessing loan applications. TheBRR System signals the shift in SBCorp.’s lending paradigm fromcollateral-based to risk-basedlending – that is, loan applicationsare no longer denied due to lack ofcollaterals. Instead, the level of riskdetermines whether an enterprise isqualified for financing.

MSMEDEVELOPMENT

AND PROMOTIONSERVICES


MARKETING

National Trade Fair (NTF).The NTF, the biggest domestic show for MSMEs in the country, was heldin March 2006 and generated PhP85.96million. Central Visayasposted the highest sales worth PhP38.08million, accounting for about44% of total NTF sales. NTF top sellers were gifts, houseware, andhome décor. The fair drew 801 registered visitors composed of 768local and 33 foreign nationals.

The Center for International Trade Expositions and Missions (CITEM),in cooperation with the SME Development Group (SMEDG) and theRegional Operations Group (ROG), organized the participation of 194exhibitors from 16 regions. NTF 2006 also featured the Third RawMaterials Showcase where the Product Development and DesignCenter of the Philippines (PDCCP) introduced new possibilities in theuse of Manila palm, bamboo veneer, and coconut.

Manila F.A.M.E. International.Some 6,249 local and foreign buyers participated in the April andOctober editions of Manila F.A.M.E, the country’s longest-runninginternational trade fair led by CITEM, generating total sales ofUSD108.62million, with Europe, U.S., and Asia as the top three buyers.

Market Matching.In 2006, the Bureau of Domestic Trade (BDT) assisted 551 MSMEsthrough market matching, resulting in PhP10million in revenue. Theseenterprises were in the manufacture of agri-based products, furniture,packaging, and chemical and industrial products. The use of NationalSME Database Market Matching facilities based in the regional andprovincial offices aided in developing and tapping business opportunitiesin the domestic and export markets.

Market development assistance included the dissemination ofbrochures, e.g., “Paano Maging Subcontractor,” to 386 government andnon-government agencies and trade associations that provideservices to MSMEs and 300 more copies to SMEs who participated intrade fairs. Copies of Domestic Trade Bulletin were also disseminatedto some 500 MSMEs. Also, market information on raw materialdesigns, trends, and processing techniques was distributed to 70MSMEs.

The BDT handled the Resource Suppliers Assistance Program (RSAP),an interagency initiative which aims to assist raw material suppliersand producers with the provision of a comprehensive assistance

SULONG FIGURES

LEGEND:

GFIs – Government financial institutions

Landbank – Land Bank of the Philippines

PhilExim – Philippine Export Import Credit Agency

SB Corp. – Small Business Corporation

Quedancor –Quedan and Rural Credit Guarantee Corporation

NLSF – National Livelihood Support Fund

SSS – Social Security System

From smallpebbles, to a

sturdy rock--wecultivate and

nurtureentrepreneurialminds and

foster a healthybusiness climate.No one is toosmall to start.

Un

de

rse

cre

tary

Zo

rayd

a A

me

lia C

. A

lon

zosIFG 6002rebmeceD-yraunaJ 5002rebmeceD-yraunaJ

naoL

sesaeleR

)MPhP(

fo.oN

stnuoccA

sboJ

detroppus

naoL

sesaeleR

)MPhP(

fo.oN

stnuoccA

sboJ

detroppus

knabdnaL 073.412,61 890,01 086,202 033.134,71 942,11 298,712

PBD 641.150,11 539 931,831 431.884,01 172,1 201,131

mixElihP 075.102 71 025,2 089.351 32 529,1

proCBS 159.244,3 690,2 730,34 622.939,2 687,1 047,63

rocnadeuQ 154.231,1 737 651,41 376.955 534 699,6

FSLN 015.95 383 447 092.52 661 613

SSS 026.303 81 597,3 - - -

LATOT 816.504,23 482,41 170,504 336.795,13 039,41 079,493


TRAINING

Through its regional offices and specialtraining centers, i.e., Cottage IndustryTechnology Center (CITC), PhilippineTrade Training Center (PTTC), andConstruction Manpower DevelopmentFoundation (CMDF), the Departmentconducted 755 training programs andseminars which benefited 21,501SMEs.

Training of Small Business Counselors(TOSCON).The Bureau of Small and MediumEnterprise Development (BSMED) tappedthe UP Institute of Small Scale Industries(UP-ISSI) to conduct three (3) batches of“Training of Small Business Counselors(TOSCON),” a training program aimed atenhancing the competency andeffectiveness of SME Counselors inproviding managerial and technicalassistance to MSMEs. A total of 67 DTIprovincial SME counselors participatedin the training.

package. It also encourages theformation of cooperatives andassociations among raw material

producers and suppliers to help themdevelop their organizational

capabilities.

SME Expo.With the theme “Sulong Negosyo”,the annual SMED Week celebratedon 17-23 July 2006 at the Market!Market! generated Php1.75 millionfrom 119 SME exhibitors. ParticipatingSMEs from Region 2 topped the fairwith total sales of Php257,100.00.Top selling sector was furniture andfurnishings with Php409,280.00 insales.

The event set up a village fiestaconcept which simulated a smallcommunity showcasing governmentinstitutions and facilities providingservices to SMEs. The exposition

SME CORNER SET UP IN MAKROThe Bureau of Domestic Trade (BDT) tied up with Makro Philippines

to put up a small and medium enterprise (SME) corner initially at

its Cubao Branch. The SME corner showcases products of 18

SMEs selected by DTI for their excellence, production capability,

track record, and potential. This project aims to help potential

SMEs to gain better access to more lucrative urban markets by

giving them the opportunity to showcase their products in the

SME corner.

FOCUS

showcased products of modelMSMEs engaged in the One Town, OneProduct (OTOP) Program.

Eight publications designed to helpbusiness development service (BDS)providers and MSMEswere likewise launched:

1. Philippine Ethnic Patterns: ADesign Sourcebook

2. Sulong Pinoy! Stoking the Fireof Filipino EntrepreneurshipVolume 2

3. Paano Maging Subcontractor4. Directory of Common Service

Facilities5. Catalog of Information

Materials for MSMEs6. SME Counselors’ Manual7. Your Guide to Starting a Small

Enterprise8. Managing an SME Center.


Competency and ProductivityEnhancement for ConstructionManpower Development.CMDF assisted various organizationsfrom both the private and publicsector to enhance their productivity.Beneficiaries included the ConstructionBrigade of the Philippine Navy,CEMEX, Department of AgrarianReform – Agrarian Reform CommunityDevelopment Project (DAR-ARCDP),and Gawad Kalinga (GK). Notably, thetie-up between CMDF and GK resultedin the house construction for thehomeless and increased theircapabilities in doing basic carpentryfor possible employment. With theprovision of on-site skills training inbasic construction, such as carpentry,masonry, and building wiringinstallation, GK beneficiaries gainedskills in building houses, whichopened for them more opportunitiesfor livelihood.

To encourage the informal sector todevelop and increase theircompetitiveness, CMDF forged aMemorandum of Understanding withthe Association of Construction andInformal Workers (ACIW) in November2006. DTI aims to share its technologyand technical know-how withconstruction workers to increase theirlevel of competency.

Community-Based Enterprise (CBE)Program.To further strengthen MSMEs inrural areas, the CBE Program waslaunched to bridge the gap betweenrural producers and suppliers ofprocessed materials. Three pilotareas namely, Abra, CamarinesNorte, and Aklan, were identifiedfor technical assistance to improve

Video Conferencing Seminar on BestPractices.In cooperation with the League of Cities ofthe Philippines and the JapanInternational Cooperation Agency (JICA),BSMED organized a Video ConferencingSeminar on “Best Practices in LocalGovernance” to promote the importanceof supporting the SME agenda andimproving LGU capabilities. Participantswere city mayors, planning officers, andother officials involved in formulatingdevelopment plans and investmentprograms, improving socio-economicinfrastructure, and promoting livelihoodand entrepreneurship.

Special Programs for SMEs.Aside from regular training programs ontrade business management and qualityand productivity, PTTC implemented the“eSMEs on the Web: Training for theDevelopment and Deployment ofWebsites for SMEs” where 30 SMEparticipants learned how to develop theirown websites. Through the fundingassistance of the Bangko Sentral ngPilipinas (BSP), the SME participants wereable to market their products over theInternet and to generate sales over a trialperiod of one year.

PTTC also conducted the training programon ”Doing Business on the Web: E-Commerce Made Easy for SME Exporters”to 126 PTTC and DTI regional trainers,supported by the Queensland Universityof Technology (QUT) and the AustralianAgency for International Development(AusAID). Also, four modules on the WorldTrade Organization (WTO) were packagedinto a pilot seminar entitled ”Opportunitiesand Challenges of the Global TradingSystem” which was conducted in thecities of Manila, Cebu and Davao.

their competitiveness. Members ofthe Bugbog West Multi-PurposeCooperative of Bucay, Abra weretrained on Bamboo Treatment /Preservation and Finishing Techniques.

As a result, their products includingbenches, stools, lampshades,placemats and square trays wereshowcased during the ImpakabsatTrade Fair held in November 2006 inMuntinlupa City. The Labo ProgressiveMulti-Purpose Cooperative (LPMPC) inLabo, Camarines Norte, on the otherhand, received training on handloomweaving and handmade paper making.Notably, 72 inmates of the Labo DistrictJail and Camarines Norte ProvincialJail including tenants from GawadKalinga sites became regular suppliersof knotted piña fiber.

Lastly, members of the AparicioAgrarian Reform Multi-PurposeCooperative in Aklan were trained onabaca twining.

DTI-Comprehensive Agrarian ReformProgram (CARP)DTI-Comprehensive Agrarian ReformProgram (CARP) extended assistance tofarmers and other rural folks in 702Agrarian Reform Communities (ARCs)through the provision of training,studies, consultancy, marketing, andother technical services. DTI-CARPmaintained its focus on enterprisedevelopment generating a total ofPhP479.52 million in investments,PhP754.75 in sales, and 34,196 newjobs. Further, a total of 786 newincome-generating projects (IGPs)were established in addition to the2,164 IGPs maintained. DTI-CARPalso conducted a total of 746 skillstraining and 1,323 entrepreneurial/managerial training. Moreover, fivehundred sixty-three (563) feasibilitystudies were prepared and completedin support of IGP establishment andother technical requirements offarmer-beneficiaries and landownersserved as well as provision ofconsultancy services.

PRODUCTDEVELOPMENT

The Product Development and DesignCenter of the Philippines (PDDCP)provided design services and technicalassistance to 1,010 SMEs to continueimproving the quality and competitivenessof Philippine products. PDDCP enabled194 SMEs nationwide to develop newproducts and package designs for foodand non-food products. At the NationalTrade Fair, the 1,277 designs providedby PDDCP were translated intoprototypes and generated sales ofPhP19.4 million.

Training programs conducted, including beneficiaries

YCNEGA smargorPgniniarTrebmuN

snurfo

forebmuN

stnapicitrap

CTTP tnemeganamssenisubedarT 07 939,1

ytivitcudorpdnaytilauQ 56 242,2

smargorplaicepS 592 013,11

CTIC

sllikSdnarefsnarTygolonhceT

sredliuBdnaerutinruFrofgniniarT

esuoHdnastfiG,skrowdooW

sdoogrehtaeLdnaraewtooF,seraw

yrleweJeniFdna

991 680,4

FDMC

,tnemeganaMnoitcurtsnoC

&tnempoleveDyrosivrepuS

dna,ytefaSnoitcurtsnoC,sreniarT

gniniarTsllikS

621 429,1

LATOT 557 105,12


Some 63 clients participated in theTrainers’ Training Program ondesign-related processes likebleaching and dyeing on naturalfibers and grasses, finishingtechniques on wood, as well asmetal and paper products inGuimaras. Also, 36 TechnologyUpdating Workshops wereconducted for 302 furniture andGTH manufacturers in NegrosOccidental, Bulacan, Camarines Sur,General Santos, Pampanga, Masbate,Biliran, Catanduanes, ZamboangaCity, and NCR, including studentsfrom University of Sto. Tomas,Technological University of thePhilippines and College of St. Benilde.

To promote the designs, 62 productdevelopment seminars/workshops,dialogues, briefings and orientationson Design Center services wereconducted. Five exhibits (Paglulunsad2006, 3rd Raw Materials Showcase,The Business of Industrial Design andDesigns 2006) and one designcompetition on jewelry weremounted. A design sourcebookentitled “Philippine Ethnic Patterns, aDesign Sourcebook” was publishedas source of local references thatindicate the unique and distinctivefeatures of Philippine products. Atotal of Php160,200.00 in sales wasgenerated.

BUSINESSCOUNSELING ANDINFORMATIONSUPPORTBSMED set up SME Center booths anddisseminated SME publicationmaterials in nine trade events namely,Ateneo Celadon Business Fair, 5thPhilippine Food Expo 2006, GoNegosyo, 4th Philippine Business Fair,Pamilyang OFWs-SMEs SummerExpo, Micronegosyo Fair, 2006Independence Day Fair, and GlobeBizfair 2006. Some 4,500 SMEs andpotential entrepreneurs obtainedinformation materials or businesscounseling from the SME Centers. Tosupport priority SME Centersnationwide, the Market EncounterGoes to Manila (MEGMA) Foundation,Inc. turned-over a total of 60 computerhardware and digital instructionalmaterials to DTI-BSMED during theSMED Week celebration.

BARANGAY MICROBUSINESSENTERPRISE (BMBE)

The Barangay Micro BusinessEnterprises (BMBE) aims to spureconomic activities by providingincentives to micro entrepreneurs.The incentives include income taxexemption, exemption from thecoverage of the Minimum Wage Law,special credit window priority,technology transfer, production andmanagement training, and marketingassistance programs.

Intensive policy advocacy effortswere initiated such as the publicationof DAO No. 2 on the ImplementingGuidelines on the Availment of theBMBE Development Fund to ease theimplementing guidelines anddocumentary requirements for BMBEregistration. Under the BMBEDevelopment Fund, six projectproposals were approved for fundingamounting to Php5,130,595.00.

SME DEVELOPMENTPLAN

Efforts to localize and harmonize theSMED Plan in 17 provinces wereconducted. Ten activity groups fallunder the SMED Plan:

1. SME information support2. SME counseling and

advisory and upgrading of

SME Centers3. Facilitating partnership/

linkages orcompetitiveness

4. Enhanced support for trade

fairs and access to marketservices

5. Product development anddesign services

6. Industry productivity and

quality7. Information technology

appreciation and

application8. Entrepreneurship training

9. SME financing supportprograms

10. Streamlining of business

regulatory requirements


CARE FORCONSUMERS

DTI remained committed in ensuring thewelfare of Filipino consumers throughadvocacy and information, watchful priceand supply monitoring and speedy actionon complaints and issues.

PRODUCT STANDARDS

The Bureau of Product Standards (BPS)intensified its monitoring andenforcement activities nationwide,conducting regular market inspections inthe National Capital Region (NCR) andfrom Region I to CARAGA to checkcompliance of consumer products withthe safety and quality requirements.Under the BPS product certificationscheme, products covered by mandatorycertification shall be subjected to testsbased on Philippine National Standards(PNS) before distribution or sale. Marketroundups resulted in the confiscation ofsubstandard products:

· 331,295 pieces of uncertified,unmarked and unbranded steelbars worth Php46.4m

· 4,006 units of uncertifiedautomotive lead storagebatteries worth over Php10m

· 816 pieces of LPG cylinders notbearing the PS Mark from LPGretailers and refillers

· 5,153 units of substandardsanitary wares worthPhp8.2million

· 24,029 pieces of substandardwiring devices, compactfluorescent lamps (CFLs), wiresand cables

BPS inspected 425 establishmentsincluding emission testing centers andsellers of liquefied petroleum gas (LPG)cylinders, steel bars, wiring devices, wiresand cables, electrical tapes, CFLs, tubularfluorescent lamps, plywood, sanitarywares, flat glass, automotive storagebatteries, break fluid, G.I. sheets, steelwire nails, fire extinguishers, monoblocchairs, and Christmas lights. Some 147,or 35%, of monitored firms were foundselling substandard products and do notconform to quality and safety standards.BPS filed charges against 112 firms, 72 ofwhich were resolved. It confiscated overP69million worth of substandard goodsand collected Php2.2million in fines.

CONSUMERWELFARE ANDPROTECTIONSERVICES


Supporting the National Chlorofluorocarbon Phase-out Plan (NCPP) led by theDepartment of Environment and Natural Resources (DENR), DTI issued DAO No. 3 series of

2006 amending the accreditation requirements for air-conditioning andrefrigeration service and repair shops. BPS developed 23 PNS under the NCPP

through its technical committees on road vehicles, household appliances,and chemistry and its subcommittees on refrigerants and anti-freezers. In

2006, BPS developed 520 PNS, bringing the total number of PNS to 5,525. Ofthis number, 77.36% or 4,274 PNS were harmonized with international

standards.

A MOA forged between DTI-BPS and the Department of Energy– EnergyResearch and Testing Laboratory Services (DOE-ERTLS) for the technicalassistance on the development of standards for electrical lightingproducts under the Philippine Efficient Lighting Market TransformationProject (PELMATP) resulted in the development of 21 PNS for energyefficient lighting (EEL) system, fluorescent lamps, CFLs, high intensitydischarge (HID) lamps, ballast and luminaries. To ensurestandardized interpretation of PNS provisions on EEL system amongDTI enforcers, BPS and DOE-PELMATP conducted seminars invarious regional offices.

SUPPLY AND PRICE STABILITY

Aggressive monitoring of the prices of basic and primecommodities nationwide significantly contributed inmaintaining stable prices in 2006. To mitigate the impact of

t h e 2%-increase in valued-added tax (VAT), DTI convened theNational Price Coordinating Council (NPCC) in January, April,

a n d November to ensure smooth coordination among members oft h e business sector and government agencies.

Notably, DTI initiated a text messaging service dubbed as the“Text DTI Presyo (Text DTI at 2920 and 2256),” to alert consumerson the current prices of basic goods in selected public markets inN C R , Cebu, and Davao.

I n February, DTI met with the Bureau of Food and Drugs(BFAD), Philippine Association of Flour Millers, Chamber

o f Philippines Flour Millers, Philippine Federation ofBakers Association Inc., Filipino-Chinese BakersAssociation Inc., flour importers and traders to assure

t h e public that pan de sal and other bakery products sold int h e market are made from safe and fortified wheat flour,a n d likewise to ensure steady flour prices. Also, a meetingw a s convened with sugar traders and millers to discuss

ways for hastening the replenishment of stocks at theretail level.

DTI also issued DAO No.10 prohibiting the imposition ofsurcharge by retailers in credit, automated teller machine

(ATM) or debit card transactions. The order prohibitsstores from putting two price tags in their products and

charge additional fees on credit card purchases. UnderDAO No.10, all modes of payment available to consumers must

always comply with the Price Tag Law.

CONSUMER ADVOCACY

The Standards Blitz Programme strengthened DTI’s informationcampaign on standards and standardization activities in raisingconsumer awareness on product quality and safety. Theprogramme consisted of four components namely, the StandardsAdvocacy Club (STAC), the Standards in the Curricula of theElementary, Secondary and Alternative Learning System Education(SCUE), the Standards Essay Writing Contest (SEWC), and theKonsyumer At Iba Pa (KATBP) radio program.

· STAC.Some 4,066 pupils, students, teachers, industry members,government agencies and consumer groups visited the BPS TestingCenter and DTI-accredited laboratories and witnessed actual tests

Empoweringand protectingconsumers is adaunting task.That’s why weneed to bevigilant 24/7.

Un

de

rse

cre

tary

Ze

naid

a C

. M

agla

ya


COMPLAINTSHANDLING

CWDs received roughly 48,000 consumercomplaints in 2006. Of this volume,46,119 or 96.1% were resolved while 269were endorsed to other agencies andbusiness establishments. Ten businessand consumer welfare centers (CWCs)were established nationwide. These

were located in SM Megamall, SMNorth EDSA, SM Southmall Las Pinas,SM Cebu, SM Davao, SM Baguio, SMBatangas, SM Pampanga, SM Iloilo,and Mall of Asia. The CWC offerson-the-spot information dealingwith various consumer welfareissues and immediate facilitation ofcomplaints.

Rules of procedure for adjudicationof administrative cases at the DTIwere revised, particularly onconsumer complaints arising fromviolation of trade and industry laws.DAO No. 07 series of 2006 simplifiedand unified varying rules ofadministrative procedures to speedup dispute resolution. Through theConstruction Industry ArbitrationCommission, the DTI resolved 18arbitration cases with a total sum indispute of P3.48 Billion, 66% ofwhich were decided within sixmonths.

BUSINESS NAMEREGISTRATION

In 2006, 280,558 business nameswere registered, 244,255 of whichwere new and 36,303 were renewals.Tie ups with internet cafes in MetroManila facilitated the registration ofbusiness names using the WeBNRS,DTI’s online business nameregistration service. A total of 18internet cafés in Metro Manilajoined the project namely, Netopia,Phoenix Internet Café, Green SotCafé, Fast Forward Internet Café,

Warzone Internet Café, E-games,Chaiwinix, Teamnux, PC Lawust, PPN,2525 Triple K Internet, 53M ComputerShop, and IPVG.

Contractors LicensingThe Philippine Contractors AccreditationBoard (PCAB) issued 4,609 licenses and973 registration certificates to qualifiedcontractors.

Monitoring and Enforcement of FairTrade LawsDTI monitored 93,332 firms and found695 of them violating fair trade laws.Collected fines amounted toPhp1.4million.

To protect the rights of consumers andat the same time encourage firms topractice responsibleentrepreneurship, DTI introduced theDTI-Certified Establishment (DTI-CE)Program. It encourages businesses toadopt a self-policing mechanism tofoster the highest level of businessethics and sustain a fair marketplace.The program awarded 422 deservingestablishments with a Seal of

Approval. Of the total number ofawardees, 237 establishmentsreceived bronze award for complyingto fair trade laws and maintaininggood customer relations throughConsumer Welfare Desks (CWDs); 152establishments received silver awardfor attaining bronze requirements,ensuring effective store operations,and adhering to social responsibility;and 33 received gold for attainingsilver requirements and implementingsome elements aligned with qualityand environmental managementsystems.

and inspections conducted on criticalproducts based on the quality andsafety requirements of PNS.

· SCUE.BPS developed 25 lesson plans and12 modules on standards to integratethe importance of standards forproduct safety and quality in thecurricula of the high school studentsand mobile community centerlearners. These lesson plans andmodules were expected to be taughtby the start of the school year inJune 2007.

· SEWC.BPS conducted the 3rd StandardsEssay Writing Contest participatedin by 24 high school students from15 schools of 12 DepEd districts inNCR. The contest further raisedstudents’ awareness on productsafety and quality through thePhilippine Standard (PS) and ImportCommodity Clearance (ICC) marksand on the significant role thegovernment plays in safeguardingthe welfare of consumers.

· KATBP.This DTI radio program serves as theagency’s vehicle in reachingconsumers nationwide to informand educate them on productquality and safety throughstandards and on their rights andresponsibilities as consumers. Onits 8th season in 2006, KATBP is airedover DZMM 630 kHz every Saturdayfrom 10:00 to 11:30 in the morningthrough the support of thePhilippine Product Safety andQuality Foundation (PPSQF), DepEd,industry associations, and othergovernment agencies. The programwas nominated in the 28th CatholicMass Media Awards and was semi-finalist in the 2006 Lingkod BayanAward of the Civil ServiceCommission (CSC). In 2006, itreceived thousands of text messagesfrom listeners mostly on queriesrelated to the topics discussed,reports and complaints, andappreciations of the program.

In celebration of the ConsumerWelfare Month, the NationalStandards Week and the WorldStandards Day, BPS conducted the 6th

Consumer Trade Fair where 72exhibitors showcased consumer-friendly and world-class productsand services with PS and ICC marks,permits and accreditation from DTIand other government agencies. Some12,000 visitors attended fair whichfeatured 20 awareness sessions ontopics such as consumer rights andresponsibilities, starting a business,and warranties.

REDUCING THE COST OF

MEDICINES

In support of the PhilippineInternational TradingCorporation’s (PITC) parallelimportation strategy, NDCfinanced the operation of thePITC Pharma, thegovernment’s corporatevehicle to reduce the cost ofmedicine by half in 2010. In2006, PITC Pharma accredited108 additional outlets ofBotika ng Bayan and operatedtwo outlets of its own. Theseoutlets carry non-patentmedicines priced 50%lower than those available in

other drugstores.

FOCUS


PHILIPPINE BUSINESSREGISTRY (PBR)

The Philippine Business RegistrySystem, a project funded by theCommission on Information andCommunication Technology’se-Government Fund and theADB-Japan Fund for ICT, wasdesigned to harmonize registrationprocesses among differentgovernment agencies. It would bedone through a web-based portalwhich houses all data sets forbusiness name registration,

GOODGOVERNANCEMEASURES

accreditation, and businessfacilitation. It was envisioned to be aready source of business data forpotential business partnersworldwide. Department Order No.38, issued in June 2006, created aproject management team, projectmanagement unit, and secretariat forproject implementation.

ENERCONEspousing the government’s EnergyConservation Program (Enercon), theDTI continued to do its share inreducing fuel, electricity, and waterconsumption within its premises. In2006, average electricity and fuelconsumption fell by 27% and 5%,respectively. To instill energyefficiency as a way of life among DTIemployees, the Palit Ilaw Projectreplaced installed high voltageelectric lamps with lower voltagelamps. Also, lights are o turned offduring lunch breaks and waterdispensers after office hours.


DTI HRDEVELOPMENTTRAININGPROGRAMDTI’s Human Resource DevelopmentService (HRDS) launched the 2006 HRDevelopment Program dubbed as“Learning Lamp Post” to sustain DTIas a competency-based agency.Eight posts were identifiedrepresenting globally knownindividuals considered pillars intheir own field. Courses were offeredcovering specific competencies orfields of specialization:

· Making Sense of Business;· Improving Personal Productivity;· Business Assertiveness;· Seven Habits of Highly Effective People;· Planning and Critical Path;· Service Plus;· Effective Business Writing;and· Online Performance and Learning (OPAL) Program.

Other competency and foundationaldiscipline-based, behavioral,cultural, and livelihood courses werealso offered as electives to eachLamp Post. These included popularcourses such as AdvancedBeadworks, Stress Management,Guitar Lessons, Herbal andDecorative Soap Making and PictureFraming.

A supplemental course called theOnline Performance and Learning(OPAL) Program was administered toall DTI directors and officials. Theprogram is an online “just-in-time”learning for DTI’s mobile officials,focusing on capability buildinganchored on core competencies andfundamental disciplines. Launchedin June, it drew 52 registered users,36 (or 69.23%) of which logged onand used OPAL actively.

INTEGRITYDEVELOPMENTACTION PLAN (IDAP)Actively participating in thePresidential Anti-Graft Commission’s(PAGC) call for all governmentagencies to pursue and implementanti-graft and corruption measuresto improve governance, DTI rankedfourth out of 70 government agenciesin compliance with the IntegrityDevelopment Action Plan (IDAP) for2006, a national program crafted tofight corruption in the government.In 2006, the DTI issued three DOsaimed at improving good governancewithin DTI.

· Department Order No. 17enjoined all DTI officialsand employees to submittheir Income Tax Return(ITR) as an attachment totheir Statement of Assets,Liabilities and Net Worth.

· Department Order No. 38created the ProjectManagement Team (PMT),Project Management Unit(PMU), and Secretariat ofthe Philippine BusinessRegistry (PBR) project,complying with IDAP’srequirement of linkingexisting databases ofcomplementary agenciesand sharing of information.

· Department Order No. 54disseminated the handbookentitled Compilation ofLaws on Graft andCorruption for the Conductof Learning-OrientationSessions.

As of end-December 2006, DTI-IDAPRating was 3.13 out of a maximum5.00. Below is a graph tracking DTI-IDAP Rating performance for the year.

KIDS PROGRAM(KABATAAN SAINDUSTRIYA DULUTANNG SAYA)

Participated in by 106 parents and kids,the 2006 implementation of the KIDSProgram focused on the strengthening ofparent-child bonding through thefollowing courses handled by FilipinasHeritage Library, Museo Pambata, andCottage Industry Technology Center (CITC):

1. Cook for Kids with Kids2. Film/Movie Appreciation

(Chronicles of Narnia: TheLion, the Witch and theWardrobe)

3. Bottle Salt and Art4. Beads Galore5. Fun with Mosaic6. Finger Painted Cards and

Paper7. Hand Puppet Making8. Hand Painted Shirts

Procurement.The Government Procurement Policy Board(GPPB) reported that DTI’s Percentage ofProcurement that underwent publicbidding reached 83%, which placed DTIamong the top three best performingagencies in government procurement.

MEDIA MILEAGEInterest from the media sector,particularly the print media, washeightened in 2006 as 85% of DTI-issuednews and photo releases landed on thenews. DTI news and photo releases playkey role in communicating DTI’s plans andprograms to its stakeholders. Aside from thepositive pick up rate, DTI-issued pressreleases also remained inexpensive buteffective. Various articles and photos werepublished in newspapers for free, whichcould have cost DTI some Php11.9millionif done through paid placements.

Negosyo at Kalakalan PhonepatchInterviews.The Trade and Industry Information Center(TIIC) facilitated 145 phonepatchinterviews aired nationwide over Radyo ngBayan’s (DZRB) Negosyo at Kalakalansegment. Most of the interviewees (82.6%)were successful DTI-assisted MSMEs, andthe rest were DTI officials promoting DTI’spriority thrusts. The program has beenongoing since 1997, focusing on thecountry’s MSMEs, investments, consumerwelfare, and other trade-related concerns. DTI Branding.The Collateral Review Committee (CRC)reviewed and approved 55 collateralmaterials submitted by the bureaus priorto production as part of its efforts tosustain the DTI corporate identity.


To improvegovernance,wepromotemeasuresthat fightcorruption.

Ass

ista

nt

Se

cre

tary

Mari

a L

ou

rde

s T.

Bau

a

LEGISLATIVE AGENDA

DTI continued to support and monitor theprogress of priority legislative proposalspending in the House of Representatives andSenate:

· Amendment to EO 226 (OmnibusInvestments Code of 1987).E.O. 226 aims to adopt an incentivesystem that is consolidated, highlyfocused, cost-effective, time-bound andsimple to administer. It harmonizes thegovernment’s policies on the grant offiscal and non-fiscal incentive.

· Amendment to RA 6977 (Magna Cartafor SMEs).The House of Representatives approvedon third and final reading the proposedamendments to RA 6977, otherwiseknown as the Magna Carta for SmallEnterprises. R.A. 6977 amends theprovision to include micro enterprisesand adopt different parameters such asdefinition of SMEs, membershipexpansion of SMED Council to includeDILG, definition of the corporate powersand amendment to capitalization andfunding of SB Corporation, andestablishment of sovereign guarantee.

· Amendment to RA 9280 – (CustomsBrokers Act).R.A. 9280 involves the simplification ofprocedures in filing export and importdeclarations. DTI wanted thesuspension of the provision, whichrequires customs brokers to sign exportand import declarations. DTI expressedsupport for single or individualcustoms brokers, partnerships orcorporations concerning customsrequirements.

Omnibus Construction BillThe bill aims to encourage, promote,support and enhance the growth of theconstruction industry through thedevelopment and upgrading of thequalifications and competitiveness ofindustry players as well as the professional,technical and financial capabilities of theindustry. In line with the rationalizationprogram of the government, it proposes thecreation of the Philippine ConstructionIndustry Development Authority with aunified organizational structure andexercising regulatory, adjudicatory,developmental and corporate powers,replacing the Construction IndustryAuthority of the Philippines (CIAP),Philippine Overseas Construction Board(POCB), Philippine Domestic ConstructionBoard (PDCB), Philippine ContractorsAccreditation Board (PCAB), and theConstruction Manpower DevelopmentFoundation (CMDF). In May 2006, DTIendorsed the bill to the Senate and HouseCommittees on Trade and Industry.


We advocate forbetter financial,technical andprofessional

capabilities tosupport andenhance the

industry.

SPECIAL PROJECTSPCs for Public Schools ProjectYear 2006 marked the thirdphase of the PCs for PublicHigh Schools (PCPS) Projectfunded by a Php600m grantfrom Japan. A total of 12,000computer units weredelivered to 1,200 publichigh schools nationwide (600in Luzon, 324 in Visayas and276 in Mindanao) benefiting1.4 millionstudents.STI trainedsome 1,200teachers onICTIntegrationon the BasicEducationCurriculum.Also, 6,000teachers andschoolpersonnelwere trainedon Basic PCOperationandTroubleshooting.

Ethanol Project and othersources of alternative fuelNDC infused equityinvestments in San CarlosBioenergy Inc. (SCBI), thefirst ethanol plant to beconstructed in the countrylocated in San Carlos, NegrosOccidental. A unique bio-energy concept, SCBI shalldevelop, construct, own andoperate an integrated

ethanol distillery and power co-generation plant that willproduce 120,000 liters of ethanolper day and approximately 8MWof power using sugarcane asfeedstock. To further boost thegovernment’s thrust to reducethe country’s dependence onconventional fuel, the NDCBoard approved to provide fundsto the Philippine ForestCorporation (PFC) for thedevelopment of the jathropaindustry as another source ofalternative fuel.

NDC-Maritime Equity Corp.(NMEC)NDC put in additional equity tofully fund the operations of theNDC-Maritime LeasingCorporation (NMLC). In 2006,NMLC procured three vessels forlease to qualified operators.NMLC is a wholly-ownedsubsidiary of NDC and a keyplayer the implementation of theStrong Republic NauticalHighway (SRNH) project of thegovernment.

Director Ma. Lourdes A. Yaptinchay

Amendment to RA 7718 – The Build-Operate-Transfer (BOT Law).Amendments to the Implementing Rules andRegulations (IRR) of the BOT Law implemented apolicy shift from a 2-Pass to a Single-Passapproval process. The revised IRR becameeffective on 13 April 2006. The DTI TechnicalWorking Group (TWG) on the BOT Law Amendmentreviewed and commented on the bill, seeking toestablish a clear policy framework for privatesector participation in government infrastructureand development projects enhancing theirattractiveness to private investors while ensuringprotection of government interests.


DTI DIRECT

DTI’S ANTI-RED TAPE INITIATIVESThe DTI was tasked to supervise red tapereduction measures in the government withthe issuance of Executive Order (EO) 557creating the Anti-Red Tape Task Force.Initially, President Arroyo issued E.O. 554eliminating fees on clearances,inspections, permits, and certificates andscrapping other documentationrequirements for the export sector.

The DTI aspires to be capable of and be inthe forefront of national endeavor towardsgood governance. As laid out in the DTIthree-year roadmap (2004-2007), the DTIcontinued to streamline its frontlineservices to enable investors, particularlyMSMEs, reduce the cost of doing businessand eradicate red tape in businesstransactions.

· DTI Direct.

The “DTI Direct” call center was launched on24 November 2006 to handle clients’queries and requests for assistanceconcerning DTI services. The DTI Direct

(751.3330) adopts a no-wrong-door policyto provide swift and reliable customersupport, being part department-wideefforts to improve and simplify frontlineservices. As of end-December, the callcenter entertained 3,459 calls. Notably,3,157 or 91.3% of queries were resolved –that is, clients were not referred or passedon to other offices – by highly competentDTI call center agents. Bulk of queries or1,533 (44.3%) were about business name;1,075 (31.1%), consumer complaints; 82(2.4%) SMEs; 21 (0.6%) investments; 18exports (0.5%), and 730 (21.1%) others.

· Business Name Registration.The DTI-National Capital Region no longerrequires business name registrationapplicants to submit two passport-sizepictures and other governmentrequirements such as ProfessionalRegulation Commission identification cardand Bureau of Food and Drugs permit.

Business hours start earlier andclients are accommodated evenduring lunch hours. Large signageson simpler procedures were installedto guide new applicants. A computerwas installed at Wing A of the DTI-NCR to enable clients to check orverify the status of their businessname application.

Satellite business registration centerswere established in prime cities ofMetro Manila where MSMEs can filebusiness name applications.Business name applicants may alsolog on to www.bnrs.dti.gov.ph or textDTINCR to 2948 for Globe and Sunusers and 3940 for Smart subscribersto access information on businessname application requirements andprocedures.

· Contractor’s Licensing.PCAB reduced its documentaryrequirements for the renewal ofcontractors’ licenses, reducing thetransaction cost by as much as Php2,500 and the processing time by78%, or from 68 down to 15 days.

· Cement and Copper Export

Clearances.

BOI reduced the processing time forthe issuance of clearances andcertificates:

- Cement Export Clearance (from 5 days to 4 days)- Copper Export Clearance (from 10 days to 9 days)- Certificate of Qualification to Import Tax and Duty Free Spare Parts and Supplies (from 10 days to 4 days)- Certifications/Endorsements for Not Locally Available (from 5 days to 2 days);- Certificate of Accreditation (from 5 days to 1 day);- Request for Modification of

Terms and Conditions of BOIRegistration as well asRequest for Cancellationof BOI Registration (from 15days to 11 days)

Fees are also waived for the application ofCement and Copper Export Clearances. A help-deskwas installed to accommodate queries andcomplaints.

· Coffee Export Clearance.The International Coffee OrganizationCertifying Agency (ICOCA) eliminated two stepsin processing export clearances, cutting theprocessing time by 60%-80% or from 25minutes down to 5-10 minutes. Likewise, theprocessing time for the accreditation of coffeeexporters was reduced from 5 days to 2 days.No more fees were collected since 01 October2006.

· Electronic Payment and Collection System

(EPCS).DTI and DOF signed a Joint DepartmentAdministrative Order (JDAO) No. 2, series of2006 prescribing the “Guidelines ImplementingRA 7892 on Electronic Payment and CollectionSystem (EPCS) in Government.” The guidelinesaim to minimize face-to-face interaction inpayment transaction and allows electronicpayments through credit cards, automatedteller machines (ATMs), debit cards, storedvalue cards, mobile wallet payments andkiosks. The JDAO is expected to eradicatecorruption and red tape in the workplace toreduce the cost of doing business forentrepreneurs and investors The guidelinescover all government agencies that currentlyuse or intend to use EPCS in collecting fees,charges, assessment, and revenues.

Overall, DTI’s frontline services adopted the“No Noon Break Policy” to provideuninterrupted service. DTI agencies have alsodisplayed signages indicating their procedures,requirements and fees as well as placed clientsatisfaction feedback boxes within thebusiness areas.

751.3330



DTI IN THECOUNTRYSIDE


It is our aimto promoteentrepreneurshipand createjobs for theFilipinopeople.

INTERNATIONALTRADE POLICYNEGOTIATIONS,FACILITATION ANDPROMOTION

Regional Export PerformanceIn the Cordillera AdministrativeRegion, DTI Benguet ProvincialOffice coordinated the participationof Demang’s Handicraft in the IgorotGlobal Organization Trade Fair inMelbourne, Australia whichgenerated a US$12,000 sales.Similarly, nine exhibitors fromIfugao brought home US$115,433and PhP192,990 from the ManilaFAME.

To promote the Ilocos region in theexport market, DTI-Region 1assisted 15 food processors in theIFEX Philippines 2006 at the PTTC.

Ilocos exhibitors raked inPhp181,990.00 in spot sales andUS$24,336 in booked orders.

In Central Luzon, 16 internationalfairs participated in by 113 SMEsin the first six months of 2006generated US$14.3m.

Also, some 25 food processorsfrom then Bicol region participatedin IFEX Philippines 2006. Twoparticipants, i.e., “Brunches andLunches Pinangat” of F. D. GonzalesFood Products and “Lola ConchingVinegar” of Sorsogon FoodEnterprises received TrendyAwards.

In Western Visayas, DTI Region 6facilitated the export shipments toJapan by the Capiz CutfoliageGrowers resulting in US$17,604 inexport sales. Eight SMEs from theregion participated to the 12th BuyPinoy Goes to Hawaii/HawaiiInternational Fair in December2006.

DTI Region 10’s One-Stop ExportDocumentation Center processed

219 export documents worthUS$14.2million for 13

exporters in MisamisOriental.

DTI Region 11coordinated theparticipation of threeDavao City-basedexhibitors to theManila FAMEInternational at theWorld Trade Centernamely, Great Giftsand Souvenirs, Inc.,Gilded Expressions,and Tetel Gift Shopwhich resulted insales amounting toUS$235,528. It also

co-organizedandfacilitated theBIMP-EAGA

joint NaturalResources

Development (NRD) andSmall and MediumEnterprisesDevelopment (SMED)Cluster meeting inDavao City to exploreareas of jointundertakings. The

regional office assistedin the roll-out of BIMP-

Undersecretary Carissa C. Evangelista

EAGA Business Portal(www.bebp.org), a community-based internet application that isexpected to strengthen the tiesamong BIMP-EAGA countries andAustralia.

In SOCCSKSARGEN (Region 12),export sales of US$43,000 wasgenerated from business matchingbetween Alter Trade Corporationand TUBAGA for 1,200 boxes ofbongulan banana. DTI Region 12facilitated the participation ofNutri Prime Farms of NorthCotabato and Kablon Farms ofSouth Cotabato to IFEX Philippines2006. Also, the participation ofRDEX International Food, Inc.,SAFIX Export, Inc., and EmmanuelTraders to Boston Seafood Show inBoston, Massachusetts, USAresulted in an initial booked orderof tuna belly worth US$10,000.Three more tuna processorsparticipated in IFEX Philippines2006 and one processor in Japanwhich generated sales of PhP4mand Y10m, respectively.

The DTI regional offices undertookmajor export facilitation programs:

— DTI CAR conducted both theExport Development Council(EDC) Pre-Congress on 09 June2006 and the Congress Properon 26 June 2006

— DTI Region 5 launched the firstBicol Export Congress inDaraga, Albay with 85participants. Dubbed as “OneNation through Exports,” the projectwas attended by the RegionalDevelopment Council (RDC) Region5 and PhilExport-Bicol. Severalissues and concerns werediscussed such as technology,material supply chain andsupport, logistics andinfrastructure, financial andother related issues

— The National Exporters Congresswas held in Cagayan de OroCity in May 2006, which wasattended by the EconomicDevelopment Council (EDC),PhilExport, RDC, and over 100exporters from the region aswell as representatives fromvarious government agencies

— DTI Region 9 facilitated the Pre-Export Congress ConsultativeWorkshop where issues andconcerns affecting exporterswere discussed and to bepresented in the NationalExport Congress


PhP500million investment forseedling propagation and farmdevelopment.

Region 11.DTI Region 11 set-up the NationalEconomic Research and BusinessAssistance Center (NERBAC) calledthe DTI NERBAC- Davao to simplifythe process of establishing abusiness. Other participatingagencies included Bureau ofInternal Revenue (BIR), SocialSecurity System (SSS), Philhealth,HMDF, Department of Labor andEmployment (DOLE), Mines andGeosciences Bureau, and CDA. Thecenter hosts the One-stop ExportDocumentation Center (OSEDC).Through the NERBAC, two large firmsnamely, Deca Homes and StargatePlastic Packaging registered withBOI-Davao Extension Office for atotal investment of P775million.Also, DTI hosted the BIMP-EAGA –Japanese Mission composed of 18high ranking officials of topJapanese firms and officials fromJapan International CooperationAgency (JICA), Japan External TradeOrganization (JETRO), Japan Bankfor International Cooperation (JBIC),Japanese Embassy and JapaneseChamber of Commerce and Industry.

During the 7th Davao BusinessConference, DTI Region 11 launchedthe Davao Region Industry ClusterPlans 2005- 2010 in cooperationwith the Davao Federation ofChamber of Commerce and RegionalDevelopment Council (RDC)-XI. Itfeatured the region’s eight priorityindustries namely, banana, mango,coconut, seaweeds, wood, mining,eco-tourism, and ICT.

Region 12.DTI Region 12 assisted in theconduct of Palm Oil InvestmentForum with the Annual PPDCIGeneral Assembly in M’lang, NorthCotabato with 80 participants.

MSMEDEVELOPMENTAND PROMOTIONSERVICES

· CAR.Participation in 33 tradefairs, 26 selling missions,511 matching activitiesand maintenance of 18trade houses resulted inPhp186.56million in salesbenefiting 1,003 exhibitorsand 640 firms. Inaddition, 152 various

— DTI Region 11 assisted newexporters through the ExportPathways Program, aninnovative strategy aimed atassisting new and existingexporters by offering client-focused interventions to fit anyrequirements at any stage ofthe business. For instance, anew coco coir and coco peatexporter (JCF Multi-products)was assisted by DTI Davao delSur in its initial shipments toChina, with volume order of 17tons worth PhP3m. DTI alsoprovided financial andorganizational managementassistance to new banana chipsexporter (Davao Northlink) ofDavao del Norte which initiallyaccessed Japanese market inearly 2006.

— DTI Region 12 met withPhilExport SOCCSKSARGENresulting in the establishmentof internal policy on financialmanagement and preparationof annual plan of activities forthe local Exporters Congress

— DTI CARAGA facilitated the 1st

Caraga Export Congressattended by 200 participantsfrom different priorityindustries. Industry issues andcommitments of concerned lineagencies were presented to EDCand PhilExport.

The DTI Regional Operations Groupensured the proper execution of DTIplans and programs nationwide.

INDUSTRYDEVELOPMENTANDINVESTMENTGENERATION,PROMOTION ANDFACILITATIONSERVICES

DTI regional offices undertookmajor investment facilitationprograms:

CAR.DTI-CAR assisted in drafting the2006 Mt. Province InvestmentIncentive Code. A domesticinvestment roadshow was launchedin Baguio City 2006 highlightingprospective investments involving23 projects valued at PhP564.45m.

Region 1.The DTI Regional Office of CagayanValley and the DTI Provincial Officeof Cagayan prepared for the 1st

Cagayan North Outbound Missionto the United States and Canadaheld in March 2006.

Region 2.DTI Region 2 led the IsabelaInvestment Promotion Rounds forthe 150th Founding Anniversary ofthe Province of Isabela capped byPhP190million worth of approvedBOI projects. The program has threecomponents namely, businessdevelopment (investment conferencecum business matching, regionalOTOP investment, and others), trade(fair and exhibits) and service (jobsfair). An investment forum inCagayan was attended by 110participants from various sectors;22 SMEs participated in one-on-oneconsultation with BOIrepresentatives, which was expectedto generate PhP440.3million in newinvestments for 15 projects. Also,the investment promotion center ofCagayan was inaugurated.

Region 3.To eliminate red tape and reduce thecost of doing business, DTI Region 3implemented the “Streamlining ofCritical Government FrontlineServices Project.” The Central LuzonInvestment Promotion Center (CLIPC)and the DTI provincial officesinitiated seminar-workshops on theissuance of Mayor’s permit,installation of Internal MonitoringSystem (IMS), capability build-upprograms (benchmarking mission)and other investment-relatedactivities. Five new Business One-Stop Shops (BOSS) were alsoestablished in the municipalities ofPorac, Macabebe, and Masantol inPampanga, and Castillejos and SanMarcelino in Zambales.

Region 6.Investment facilitations generatedPhp2.2million in investments whichis 217% over its annual target.

Region 9.Zamboanga Sibugay received aninitial investment of PhP57millionfrom RRN Kuyo Rubber Enterpriseswhich spawned 78 new employmentopportunities in the province.Another rubber investor, AdeltoneRubber, was linked with PharmaRubber Company, enabling theformer to supply around 80-100MTof SPR20 rubber monthly to thelatter. Likewise, the trainingconducted in Isabela City on rubberproduction and managementfocusing on nursery developmentand farm management resulted in


skills and managerialtraining programs wereconducted for 4,022participants from varioussectors.

· Region 1.Some Php22.75million insales was generated from33 trade fairs and exhibitsparticipated in by 500exhibitors from varioussectors, including OneTown One Project (OTOP)clients and ComprehensiveAgrarian Reform Program(CARP) beneficiaries.Twenty four marketmatching activities werelaunched which enabled 27firms to establish marketlinkages. DTI-Region 1maintained four tradehouses in the commercialcapitals of each provincewhich significantly helped62 producers. In the firstsemester of 2006,PhP700,000 worth ofproducts were sold in thesetrade houses.

· Region 2.DTI-Region 2 partneredwith the CanadianExecutive ServiceOrganization (CESO) for thelaunching of the CESOProgram Assistance to SMEDevelopment in the region.The program was designedto fully assist priorityOTOP projects in theprovince of Nueva Vizcaya,Quirino, Isabela, andCagayan.

The “NV Goes to AlabangTrade Fair” and “Gameng TiCagayan Valley Trade Fair”generated PhP43.9millionin sales. “Padday na Lima2006”, a Region 2 trade fairat Alabang FiestaSupermall, also generateda total sale ofPhP4.9million. About 75MSMEs from five provincesof the region participatedin the event. DTI-Region 2conceptualized the “DRIVEfor LIFE” (Developing RuralIndustries and VillageEnterprises for Living andInspiring F ilipinoExcellence), a specialproject for MSMEs inCagayan Valley to generatefunds for the developmentof various industries andOTOP projects. The projectwas launched in Toronto,Canada; Chicago, Illinois;


and Los Angeles, Californiaduring the 1st CagayanNorth Investment Missionin USA and Canada.

DTI Region 2 also providedservices to displaced andreturning OverseasFilipino Workers (OFWs)from Lebanon at the heightof Israel-Lebanon conflictin 2006. DTI businesscounselors gaveorientations to more than1,100 OFWs on businessopportunities, starting abusiness, and financing.

· Region 3.As September 2006, DTIRegion 3 generatedPhp1.4million throughparticipation in 87 localfairs, establishment andsustenance of 13Pasalubong Centers andvarious market matchingactivities.

· Region 4A.Some 263 training sessionswere attended by 8,572participants from varioussectors. A total of 714exhibitors participated in91 fairs that generatedPhp50.3million.

· Region 4B.Total sales of PhP14.5million was generated fromparticipation in nationaland local trade fairs,market matching activities,and operation ofpasalubong centers. DTIOccidental Mindorofacilitated businessmatching for three saltproducers which resultedin the sale 20,200 bags ofiodized salt worthPhp1.733million. InMarinduque, an inter-agency meeting in theMunicipality of Torrijos ledto the establishment of theLoom Weaving Associationof Marinduque; aresolution was passedadopting the loom weavingindustry as themunicipality’s OTOP. DTIRomblon, on the otherhand, facilitated therelease of Php380,000grant from the PriorityDevelopment AssistanceFund (PDAF) for two SMEsand for the establishmentof two pasalubong centers.Also, DTI Palawan matchedIsaub Rootcrop Farmers


the successful streamliningof business licensingprocedures in Ormoc City.

· Region 9.The region’s various fairs,market matching activitiesand SME display centersresulted inPhp518.2million in sales,benefiting by 525exhibitors and 199 firmswhich were matched forpossible business DTIRegion 9 coordinated andfacilitated 119 trainingprograms which enabled4,376 participants fromdifferent sectors toenhance theircompetencies.

· Region 10.The Advocate of PhilippineFair Trade, Inc. (APFTI)served as the key partner ofDTI Region 10, togetherwith other governmentagencies and LGUs, inMSME development. APFTIand DTI spearheaded thelaunching of the WorldTrade Fair in May 2006,considered as the biggestinternational fair tradecelebration. Similaractivities were heldworldwide including tradeexhibitions in USA andKenya, concert in CzechRepublic and fair tradeshows and public forum inCanada and in the country.The theme was “Fair TradeOrganizations NOW” andthe Philippine battle crywas “PINOY! Go Fairtrade.”The event also showcasedthe launching of the SalayHandmade PaperIndustries Incorporated(SHAPPI) Shoppe, cited asthe first fair trade shop inMindanao.

· Region 12.DTI Region 12 successfullynegotiated with KCC Mallof Gensan in putting up theSarangani SME PasalubongCenter-Wall Shop for free,and was opened to publicin July 2006. Fifty fairs,three selling missions, 115firms matched, and twenty-eight SME display centersand trade housesgenerated a total sale ofPhP142.2million, a bigboost to 984 exhibitors.Some 167 trainingprograms were facilitatedand conducted, including

skills and managerialcourses, which greatlyimproved the capabilitiesof 8,214 participants.

· CARAGA.The region made domesticsales of Php120.8millionfrom business consultancyservices, market matchingactivities, selling missionsand SME display centersand trade houses. The fourSME centers maintainedcontinued to provideservices to 4,256individual entrepreneursand enterprises. Varioustechnical assistances,consultancy services,training sessions,capability buildingseminars and businessinformation materialsdeveloped andstrengthened 3,254 SMEs.Nine product developmentclinics led to 99 newproduct designs andprototypes from which 79new products weredeveloped.

CONSUMERPROTECTION ANDWELFARE SERVICES

A. Business Name RegistrationSystem (BNRS)In 2006, 280,558 businessname (BN) applications wereapproved by the regional andprovincial offices nationwide.Of the total number ofregistration, 244,255 were newand 36,303 were renewals.

B. Consumer ComplaintsResolution RateNotably, 96.10% or 46,119 of47,989 consumer complaintsreceived by CWDs nationwidewere resolved in 2006. Bulk ofthe complaints were onviolations of the Consumer Act(RA 7394), particularly onconsumer products and servicewarranties, liability for productand service, and productquality and safety.

C. Compliance with Fair TradeLaws (FTLs)Overall compliance rate of 99%to fair trade laws wasmonitored by the DTI regionaland provincial officesnationwide.

Association with Selecta IceCream for the supply of 85tons of ube at Php13,500 perton (worth Php1.147million).The association has 60farmer members whosemajor crop is ginger andube.

· Region 5.Region 5 was the partnerregion of CITEM’s PartnerRegion Program (PRP). Underthe program, selected foodcompanies were assisted infood packaging anddevelopment to make theirproducts competitive in bothdomestic and internationalmarkets. Major domesticfairs such as NTF, OTOPLuzon Island Trade Fair, andOrgullo Kan Bikol (OK Bikol)generated Php19.6million.Seventy other provincial anddomestic fairs producedPhP31.281million in sales.On product development,213 new designs weredeveloped and introducedduring the fairs. A brandname and logo dubbed as“The Chosen Pili” wasintroduced.”

· Region 6.A total of Php247.6m wasgenerated from conducting,facilitating, andparticipating in 38 tradefairs. Intensive marketmatching resulted indomestic sales worthPhp106.044million.Moreover, the 15 tradehouses being maintainedspawned PhP53.1million insales.

· Region 7.In Central Visayas, 195 newMSMEs were developed, 769existing MSMEs assisted,and 16 SME centersmaintained benefiting 1,591MSMEs. In 2006, 136training programs wereconducted and a total ofPhP247.6million wasgenerated from 38 tradefairs, 153 matching activitiesand maintenance of tradehouses.

· Region 8.Awarded as the Best Sub-national Reform in Asia for2006 by the donorCommittee EnterpriseDevelopment on 27 July 2007due to the BusinessProcessing and LicensingServices (BPLS) which led to


ONE TOWNONEPRODUCT(OTOP)PHILIPPINESOne Town One Product (OTOP)Program, a priority program of thegovernment as indicated in theMedium-Term PhilippineDevelopment Plan (MTPDP) 2004-2010, aims to promoteentrepreneurship and create jobs.OTOP-Philippines offers businesscounseling, skills andentrepreneurial training, productdesign and development,appropriate technologies, andmarketing through localgovernment units (LGUs), nationalgovernment agencies and theprivate sector.

OTOP’s progress in 2006 createdbig impact on the whole Philippineeconomy, with its highly positiveeffects reaching the grassroots:· 1,240 city, municipal,

provincial, and regional OTOPproducts from only 16regional model OTOPs in 2004

· 70,609 jobs created· P1.89billion investments· P1.81billion domestic sales· $92.23million export sales· 1,960 new MSMEs developed· 5,968 new MSMEs assisted· 1,218 OTOP market outlets

nationwide established

The OTOP Program likewiseheightened the awareness of SMEs,including cooperatives and LGUs,on the importance of trademarksand collective marks. Incooperation with the IntellectualProperty Office of the Philippines(IP Phil), at least one cooperativeapplied for collective markregistration for pancit Bato locallyproduced in Camarines Sur. Also,the provincial governments ofBataan and Pampanga filed theirrespective trademark applicationsfor indigenous products like bags,textiles, and processed foods.These increased the number ofcooperatives and LGUs which filedtrademark and collective markapplications since 2005.


noigeR POTOledoM

RAC eeffocdetsaoR

1noigeR erutinrufdooW

2noigeR gnihsinrufemoH

3noigeR rocedyadilohdnastfiG

A4noigeR ehcam-repaP

B4noigeR latnubnevoW

5noigeR scimareC

6noigeR oobmaB

7noigeR aiffarnevoW

8noigeR lessuM

9noigeR deewaeS

01noigeR selbategeveulavhgiH

11noigeR spihcananaB

21noigeR ananabhserF

AGARAC mlapliO

ytiC POTOledoM

gnoyuladnaM buhTCI

apulnitnuM epohfoeerT

gisaP noitaminA

soretaP tulabdelttoB

nozeuQdnahtlaeH

ssenllew

giugaT aranapotuP

Metro Manila also adopted the OTOP program.

Annual Report 2006

Documents

Transcript of Annual Report 2006