Archive for the ‘Industry’ Category

Last year, the Fair Trade Alliance (FairTrade) brought to the public’s consciousness the economic dimension of the unregulated exodus of our health and mission-critical workers through a one-page ad entitled “Saan Pupulutin Ang Pilipinas Kung Wala Nang Industriya?” The Alliance raised the grave threats facing the country because of the unchecked outflow of mission-critical skills and talents such as the likely closure of more hospitals, the grounding of the domestic aviation industry and the collapse of critical industries, e.g., power, steel, petrochemical and telecoms industries. The ad generated a lot of discussions and debates on the FairTrade’s stand.

Some neo-liberal economists are saying that the exodus problematique can easily be solved through the free interplay of the supply and demand forces, specifically through the increased training and education of pilots, engineers and other mission-critical personnel and professionals. They argued that the remaining industries should simply invest more in the training of new pilots, engineers and other professionals to replace those who have left the country.

This answer is a non-solution.

First, it takes time to identify, develop and hone talents and skills. Second, it is expensive to invest in the development of these talents and skills. Finally, our own industry becomes less competitive and loses out in global competition while waiting for the new talents and skills to be developed.

As it is,we are honing skills and talents for other countries, which have managed to avoid invest time and money in producing their own mission-critical personnel and professionals. In the process, they are able to save their own critical industries and economy, while our own industries suffer and even collapse.

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By Bernadette S. Sto.Domingo
Published on the September 4, 2007 issue of the BusinessWorld

COUNTRIES IN SOUTHEAST Asia and the Pacific, the Philippines included, were the least labor productive in Asia, with not enough employment opportunities being created in the region, the International Labor Office (ILO) said in its latest “Key Indicators of the Labor Market.”

The executive summary of that report described labor productivity in Southeast Asia and the Pacific as “stagnant,” compared to the rest of Asia.

It said productivity, measured in US dollars as output per person employed, in the region was much slower than other regions, posting an average annual increase of just 1.6% between 1996 and 2006.

And in Southeast Asia, the Philippines posted the lowest productivity in 2005 among the five original members of the Association of Southeast Asian Nations.

The study showed workers in the Philippines added $7,271 in value to the economy in 2005, compared to a $9,067 average for “Southeast Asia and the Pacific.”

The average for the eight Southeast Asian markets surveyed was $14,062.25 for 2005.

Value added per worker in the Philippines’ Southeast Asian neighbors varied widely. Philippine workers’ output was better than: $2,853 in Cambodia; $4,541 in Myanmar; and $4,809 in Vietnam. But workers in the Philippines fared poorly compared to counterparts in the four other original ASEAN members, namely: $9,022 in Indonesia; $13,915 in Thailand; $22,112 in Malaysia; and $47,975 in Singapore.
Labor productivity in South Asia averaged $7,531 in 2005. Productivity in the four markets in that region measured as follows: $3,315 in Bangladesh; $6,587 in India; $8,247 in Pakistan; and $11,323 in Sri Lanka.

Rene E. Ofreneo, executive director of Fair Trade Alliance and former dean of the University of the Philippines School of Labor and Industrial Relations, said the Philippines needs a strategic road map for productivity upgrading.

“We have embraced globalization in a rather aimless way, unlike other neighboring countries in East Asia. We need a clear industrial vision. We need to invest in the industry particularly in technology, new machinery, factories, etc.,” he said in an interview.

He said the government and the private sector should be more decisive on the issue of smuggling, dumping of excess goods in the country, recalibrating trade liberalization commitment, as well as acquiring new technology.

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Last July 17, FairTrade published, in the Philippine Daily Inquirer and the Philippine Star, an open letter to the President on trade liberalization and was signed by various FairTrade partners, networks and friends. Here’s the text:

Zero tariffs para sa dayuhang kalakal?
Trabaho at negosyo para sa ibang bayan?

Madame President:

In the past, you not only championed the nurturing and strengthening of our industrial base. You even took the unprecedented bold move of temporarily freezing tariffs. However, some of your technocrats maybe straying from your vision. We therefore bring this matter to your attention, so that the Philippines may not appear to be an aberration in Asia.

By lowering our tariffs ahead of other Asian countries and yet failing to provide our local producers a competitive enabling environment (cheaper energy and utilities, quality infrastructures, friendly business rules, credit access, etc.), some of our own government officials have managed to stop our industrial and agricultural sectors from growing in the last three decades! In this period, the Philippines was overtaken and left behind in the growth process by our Asian neighbors. Even Vietnam is about to overtake us

And yet amazingly, some of our economic technocrats are bent on pushing the country to the extreme edge of the disastrous program of unilateral and one-sided economic liberalization. They want our industrial tariffs, at an average of five (5) per cent and already the lowest in Asia with the notable exception of Singapore (whose industry enjoys heavy government assistance) and Japan (which maintains a labyrinthian system of non-tariff protection), to even go down to zero! This despite the fact that our government is facing a severe fiscal shortfall – with the Bureau of Customs unable to meet its targets because of our low tariff rates and widespread smuggling, and our Bureau of Internal Revenue unable to collect more taxes from a shrinking domestic industrial sector. This illogical move to go zero tariff shall reduce the government’s revenue and weaken further our domestic industrial and agricultural producers!

For example, the domestic cement industry is now able to survive the existing five per cent tariff, which is unfairly low compared to the 50 per cent tariff imposed by Malaysia, 40 per cent by Vietnam, and 10 per cent by Thailand (which maintains zero-cement import policy).

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From reel to real

The Fair Trade Alliance (FairTrade), Directors’ Guild of the Philippines, Film Academy of the Philippines (FAP), Nagkakaisang Manggagawa ng Pelikulang Pilipino and Independent Filmmakers Cooperative forge partnership in actualizing the Philippine Film Industry Roadmap in a press briefing held at Newsdesk Cafe in Quezon City.Stakeholders from the film industry together with FairTrade signed a Memorandum of Agreement (MOA) that will put together the film industry’s “roadmap.”Ka Bobby Tañada, lead convenor of Fair Trade, says that the Alliance will support and help Philippine film industry stakeholders in making the roadmap and concretize it by pushing it to the government.

FairTrade secretariat member and heading the operations of the film industry roadmapping project Catherine Manzano said, “The initiative began when FAP approached FairTrade for assistance. Since FairTrade focuses on campaigns on trade and industry and the film sector is an industry that contributes immensely to the national economy, its very easy to heed FAP’s call.

“The road map or development plan will contain guidelines on what the stakeholders and the government should do to help improve the movie industry.”

“There will be a research group that will be formed to gather data for the roadmap. The Film Institute of the University of the Philippines will participate in data collection,” Manzano added.

Leo Martinez, FAP Director-General cited the film industry’s problems like the lack of technology, the inability of the industry to catch up with global trends and more importantly, the lack of support from the government in terms of funds and direction. The position paper of the Film Academy on the reduction of amusement tax on films was also distributed in the press briefing.

Multi-awarded director Carlitos Siguion-Reyna of the Directors’ Guild of the Philippines talked about how heavy taxation negatively affected the ability of the industry to produce films. How ironic that film is one of the cheapest forms of entertainment in the country yet it is highly taxed. Taxes from both the national and municipal levels are being imposed on the gross earnings of films.

Also, Ms. Jeck Cantos, Chief-of-Staff of Cong. Erin Tañada of the 4th District of Quezon Province graced the press briefing. According to Ms. Jeck, Cong. Erin will be very supportive of the efforts of the film industry stakeholders by participating in the roadmapping project.

Don’t pull that plug
Clipped wings prevent Philippine cinema from soaring
Don’t pull the plug on the comatose Philippine film industry
Press briefing on film industry roadmapping
Roadmapping for local film industry
Position paper of FAP on the reduction of amusement tax on films from 30% to not more than 10%

By Marinel Cruz
Published on D1 June 21, 2007 issue of the Philippine Daily Inquirer

Don’t pull the plug on the comatose Philippine film industry.

This was the battle cry of representatives from four major industry stakeholders that convened yesterday to formulate a “development plan” for the “survival” of the movie industry.

Top officials of the Independent Film Cooperative, Film Academy of the Philippines, Directors’ Guild of the Philippines and Nagkakaisang Manggagawa ng Pelikulang Pilipino signed a Memorandum of Agreement (MOA) that would formulate an industry “road map.”

A press briefing was held at the Newsdesk Café in Quezon City, organized by the Fair Trade Alliance (FTA), a broad multi-sectoral coalition of formal and informal labor, industry, agriculture, nongovernment organizations and youth “pushing for trade and economic reforms.”

“The road map or development plan will contain guidelines on what the stakeholders and the government should do to help improve the movie industry,” explained FTA Secretariat Catherine Manzano.

Manzano added that the convention focused on the reduction of amusement taxes, conditions that spelled out the need for road-mapping and a report on the series of stakeholders’ meetings that began in February 2007.

How it started

A research group—to be headed by the FTA Secretariat—will be formed to gather data for the road map. The Film Institute of the University of the Philippines will participate in data collection, Manzano added.

“The initiative began early this year when the FAP approached us for assistance,” Manzano told Inquirer Entertainment in a phone interview on Tuesday. “The FTA focuses on campaigns on trade and economy. Since the film industry contributes to national economy, we decided to heed the FAP’s call.”

She added that, in the stakeholders’ previous meetings, two problems were identified: Lack of funding support and lack of governance and direction.

“Upon closer analysis, it becomes evident that the industry’s problem is more than just the lack of technology or the inability of local films to catch up with global trends,” Manzano noted. “The industry’s problems are heightened by taxes. The government is raking in more than it bargained for from an industry it doesn’t even consider as one.”

Manzano pointed out that tax collected from movies are designed to upgrade equipment, conduct training and implement programs aimed at developing the industry and its workers. It is also meant to ensure the welfare of movie workers.

“There is a need to reassess policies governing the film industry, and develop an industry plan aimed at sustaining its growth,” Manzano stressed.

Some forty years ago, the Philippine film industry is said to have reached its golden era. Filipinos are more than willing to go to the cinemas and religiously watch locally produced films. They scream their lungs out whenever their idols’ faces are flashed on the silver screen. These idols are not Hollywood stars. They are homegrown talents as much as their movies are. Fans seemed to have an unquenchable thirst for movies, Filipino movies that is. Indeed, the Philippine film industry took to the skies during these years and for a few more years that followed.

Surprisingly, the number of theater houses during those days are relatively few. There are a number of reasons why the film industry continues to plunge. Two years ago, 58 Filipino competed with 2087 foreign films mostly from Hollywood. This only means that there aren’t enough Filipino movies to choose from. In fact, UD$7 million out of the US$76 million come from a two-week run of exclusive Filipino films during the Metro Manila Film Festival. If a mere two-weeks can sell 47 million tickets, about 129,000 people per day, imagine what a longer run would do for the recuperation of the Philippine movie industry.

“We must not forget the role of the Philippine film industry as a potential job generator, potential culture enhancer, potential nation builder and potential platform for industrial development. The nation is neglecting an almost sure winner,” Dr. Rene Ofreneo, executive director of Fair Trade Alliance said.

Stakeholders have come together to act on the continued decline of the Philippine Film Industry. Since the 1st quarter of this year, various stakeholders of the Philippine Film Industry i.e. Film Academy of the Philippines, Directors’ Guild of the Philippines, Nagkakaisang Manggagawa ng Pelikulang Pilipino and Independent Filmmakers Cooperative who sought the assistance of the Fair Trade Alliance, a broad multisectoral coalition of formal and informal labor, industry, agriculture, NGOs and youth pushing for trade and economic reforms, have been meeting to discuss the state of the film industry.

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Industry stakeholders unite to save the dying Philippine film industry; an industry development plan is needed to ensure the survival of the industry

Stakeholders has come together to act on the continued decline of the Philippine Film Industry. Since the 1st quarter of this year, various stakeholders of the Philippine Film Industry i.e. Film Academy of the Philippines, Directors’ Guild of the Philippines, Nagkakaisang Manggagawa ng Pelikulang Pilipino and Independent Filmmakers Cooperative sought the assistance of the Fair Trade Alliance, a broad multisectoral coalition of formal and informal labor, industry, agriculture, NGOs and youth pushing for trade and economic reforms, have been meeting to discuss the state of the film industry. They have identified two major sets of problems – lack of funding support and governance and direction.

Upon closer analysis, it becomes evident that the problems of the industry is more than just the lack of technology or the inability of domestic films to catch up with the global trends. The country’s economic and political situation greatly affected the film industry and it resulted to slow degradation of Philippine Cinema. The problems of the industry are further heightened by the imposition of taxes. The Philippine Film Industry is one of the highly taxed industries. This means the government is raking in more than they bargained for from the industry that they don’t even consider as one.

The taxes collected from movies are meant to be used to improve the industry so that it would be able to compete globally by upgrading equipment, conducting trainings and implementing programs aimed at developing the industry and its workers. Taxes collected are also meant to ensure the welfare of movie workers.

Therefore, there is a need to re-assess the industry, review the policies governing the film industry and, most important of all, develop an industry plan aimed at reviving and sustaining the growth of the Philippine movie industry. The Philippine Film Industry Roadmapping is one way of determining the path the industry is taking and identifying the road it needs to take.

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By Ma. Elisa P. Osorio
Published on The Philippine Star

THE Tariff Commission will recommend to Malacañang the elimination of duties on the importation of cement, a move that is expected to bring down cement prices in the local market.

A three-percent tariff is currently levied on every 40 kilos of cement coming from the Association of Southeast Asian Nations (ASEAN) and five percent from non-ASEAN members.

World Bank country director Joachim Von Amsberg earlier said the price of cement in the Philippines is “too high” and suggested opening up the industry which is dominated by three major players.

“We need to inject more competition in the market,” said a ranking TC official who spoke on condition of anonymity.

The official added TC chairman Edgardo Abon and his two commissioners have recognized the need to remove the duties imposed on cement in order to make the product cheaper.

The recommendation will be forwarded to the Cabinet-level Committee on Tariff and Related Matters (CTRM), which will decide if it would be carried for the issuance of an executive order (EO).

But cement manufacturers strongly opposed the move, saying the removal of tariff on cement will pave the way for dumping, which will cause the industry to lose billions.

“The zero percent tariff is very damaging to the industry,” Cement Manufacturers of the Philippines (CeMAP) president Ernesto Ordonez said.

A multisectoral coalition advocating trade and economic reforms has also supported CeMAP’s position to keep the tariff on cement.

The Fair Trade Alliance, through their lead convenor Wigberto Tanada said manufacturers in China , Taiwan, Japan and other competing countries would be shipping their cement to the Philippines especially when they run out of silos and warehouses to store their quick-hardening cement.

“These excess capacities are targeted for the Philippines because of our fast growing market for infrastructure building,” Tañada said. “There is no more room for this quick hardening surplus cement in their silos and warehouses. The factories in China, Japan and other countries would ship them out at artificially low prices. They have little to lose.”

The cement industry is dominated by three major players — Cemex, Holcim and LaFarge- but CeMAP said there is hardly any cartel in the industry since there is even a price war among the competitors.

Ordonez questioned the motive behind the tariff elimination, pointing out that there is only a need to remove the safeguards if there is a cartel. “The industry is as liberalized as they can come,” he explained.

Ordonez said the tariff is a way to level the playing field. In fact, he said the tariff in the Philippines is much lower compared to Malaysia, which has 50 percent, and Vietnam, with 20 percent.

“This (tariff removal) sends the wrong signal,” he lamented.

Ordonez said the move is unfair for the foreigners who came in to invest in the country. “They put in capital. They gave us labor opportunities. We should appreciate them,” he stressed.

He said after the 1997 Asian financial crisis, the local cement companies were faced with a shrinking market and financial problems. International players then came in as “white knights” to save local companies from their financial woes.

According to the TC report, the crisis ensured that the local companies were bought for a bargain, if not basement, prices. Between 1997 and 1999, Blue Circle, Cemex, Holcim and Lafarge took over twelve companies which gave them 89 percent of total industry capacity.

By Max V. de Leon
Published frontpage on the June 8, 2007 issue of BusinessMirror

THE Tariff Commission (TC) has ruled against local cement manufacturers and will be recommending to Malacañang the elimination of tariffs on imported cement “to inject more competition to the market.”

A ranking trade official said the commission will forward its recommendation to the Committee on Tariff and Related Matters (CTRM), which will decide if it would be carried for the issuance of an executive order (EO).

The recommendation was made over the objection of the Cement Manufacturers’ Association of the Philippines (CeMAP) and the Fair Trade Alliance (FTA), which separately warned of its adverse results.

The source said the TC’s collegial body composed of chairman Edgardo Abon and his two commissioners recognized the need to bring down to zero the duties imposed on cement, to pave the way for the entry of imported cement at lower landed cost.

After this, the source said it would now be the duty of the Department of Trade and Industry (DTI) to make sure that importers will not be taking advantage of this by just leveling their prices with those of the local manufacturers.

“There should be vigilance on the part of the government,” the official said.

The commission conducted a hearing on May 8 on the petition to eliminate the 3-percent tariff imposed on cement coming from Asean countries and 5 percent for non-Asean members.

It was prompted by complaints from different sectors that the prices imposed by the domestic cement industry, dominated by foreign firms Holcim, Cemex and Lafarge, are too high, reaching as much as P200 per 40-kilogram bag at some point.

The source said the CTRM will discuss how the government will be able to ensure that the tariff elimination will really translate to reduced cement prices.

One way of doing this, the official said, is to tie the importers to an agreement that with the lower landed cost of their imports, they will be selling their products at levels lower than the prevailing prices.

Also, the source said the CTRM will also decide on how long the zero tariff will be in effect or set up a mechanism that would determine when the original tariffs will be reverted.

The commission came up with its decision despite an appeal from the CeMAP for another public hearing, as the group was not properly represented and heard in the May 8 hearing.

CeMAP is also keenly awaiting the findings of the DTI on the investigation it made on the reported overpricing by the domestic industry.

The DTI will compare the operations cost of the industry players with their prices in determining if they are indeed overpricing.

The Fair Trade Alliance (FairTrade), a broad multisectoral coalition advocating trade and economic reforms, opposed the CTRM proposal to allow importation of cement at zero tariff.

FairTrade lead convenor Wigberto Tañada said that manufacturers in China, Taiwan, Japan and other competing countries would be shipping their cement to the Philippines especially when they run out of silos and warehouses to store their quick-hardening cement.

Tañada expressed alarm that cement imports will harvest the benefits of the billion-peso infrastructure program to the detriment of the local cement industry, represented by 10 companies.

There will be unfair competition, Tañada said, because the imports will sell excess production at prices much lower than the prices in their respective countries.

“These excess capacities are targeted for the Philippines because of our fast-growing market for infrastructure building,” Tañada said.

“There is no more room for this quick-hardening surplus cement in their silos and warehouses. The factories in China, Japan and other countries would ship them out at artificially low prices. They have little to lose.”

Tariff body seeks free entry of cement imports
Tariff Commission
Cement Manufacturers’ Association of the Philippines

THE Fair Trade Alliance (FairTrade), a broad multisectoral coalition advocating trade and economic reforms, opposed yesterday a proposal at the Tariff Commission to allow importation of cement at zero tariff.

FairTrade lead convenor Wigberto Tañada said that manufacturers in China, Taiwan, Japan and other competing countries would be shipping their cement to the Philippines especially when they run out of silos and warehouses to store their quick-hardening cement.

Tañada expressed alarm yesterday that cement imports will harvest the benefits of the billion-peso infrastructure program to the detriment of the local cement industry.

There will be unfair competition, the Tañada said, because the imports will sell excess production at prices much lower than the prices in their respective countries.

“These excess capacities are targeted for the Philippines because of our fast growing market for infrastructure building,” Tañada said.  “There is no more room for this quick hardening surplus cement in their silos and warehouses,” he said. “The factories in China, Japan and other countries would ship them out at artificially low prices. They have little to lose.”

Ironically, he said, the government itself could be encouraging the massive entry of imports by eliminating import tariff of five per cent (MFN).

“We are like surrendering the market to imports on a silver platter,” Tañada reiterated.

Predatory pricing by imports is aimed at exterminating local manufacturers, he said. Once the imports control the market, they will dictate the prices.

Also, Tañada said that the country should be consistent with its objective of building self-sufficiency in cement, a strategic raw material that supports the labor-intensive construction industry.

“If we become vulnerable to fluctuations in supply of cement in the world market, our construction industry would face risks of project postponements and even cancellations,” he said.

“Many of our labor force in the labor-intensive construction business would be thrown out of work,” he said.

Further, Tañada said, the quality of cement imports is not as closely checked and monitored as Philippine cement.

“The Filipino and domestic manufacturing industries should be supported and nurtured,” he said.

He said there are 10 domestic companies already competing in the local market.




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  • Founded in 2001, the Fair Trade Alliance (FairTrade) of the Philippines is a broad multisectoral coalition of formal and informal labor, industry, agriculture, NGOs and youth pushing for trade and economic reforms.
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