Secretary s Message. I am optimistic about our country and our future.

Transcription

1 Secretary s Messae I am optimistic about our country and our future. In spite of the challenes facin many of our fellow citizens today, my messae remains clear and simple: let us reconize our country s strenths and fully utilize our competitive advantaes. Consider our relative ede: The Philippine demoraphy is characterized by a hih percentae of youn people compared to most Asian countries, aside from bein hihly educated and Enlish-proficient. We have 380,000 collee raduates yearly - 70,000 of whom major in the technical fields of Information and Communications Technoloy (ICT), Computer Science, and Enineerin; and 100,000 major in business-related fields. Our country s location is strateic. It is reachable within three to four hours by plane and within 24 hours by ship from key Asian cities. Our country is considered the ateway to ASEAN, deemed as the fastest rowin reion in the world, with a market of 550 million people. The Philippines is blessed with abundant natural endowment. Studies show that it has the richest concentration of marine life in the entire planet. Teemin with life on its coral reefs, manrove swamps, searass beds and soft-bottom habitats, our islands are the marine counterpart to the Amazon rain forest in terms of concentrated biodiversity. It also has the world s fifth richest mineral deposits; and 20% of world nickel is found in the country, makin minin a potentially major industry. As we look at our inherent advantaes, we must also see the many opportunities around us. For example: Japan s ain population complements our resources; China s phenomenal population rowth translates to a bier market; and our tradin partners rowin economies promise expandin export potentials. The opportunities abound and it is our duty to avail ourselves of them. The DTI s aenda is to create economic activity. Its focus is to make the economy bier and stroner by implementin measures that will attract more investments and allow businesses to row and expand. This is what DTI hopes to accomplish. Thus, consistent with the President s aenda, the DTI Roadmap has set the followin course: 1. Support for entrepreneurs, particularly micro, small and medium enterprises; 2. Sustainable investments in industries and infrastructure; 3. Strateic export promotion; 4. Service environment and culture; and 5. Stable prices and consumer welfare. 1

2 Our priorities are desined to provide a balanced combination of strateies to help the overnment BEAT THE ODDS towards the country s total development. Amon other thins, our ood overnance efforts shall promote balanced budetin to ensure that our resources are used where they will be most beneficial. Infrastructure development shall be promoted to improve facilities in the country, especially transportation, roads, electricity, water and other utilities eneration. We shall support the overnment s drive to provide education for all throuh the construction of more school buildins. At the same time we shall also educate and promote the welfare of consumers in cooperation with the private sector and other overnment aencies. Most of all, we shall work for the rowth and development of our economy by eneratin investments, creatin jobs, deconestin Metro Manila, and developin new centers for industry and services, such as Subic and Clark. I, therefore, enjoin all DTI heads of aencies, bureaus, corporations, and reional and provincial offices, toether with your staff, to harmonize your respective aency plans with this DTI Roadmap. Goals have been set and I expect their attainment throuh your active participation and contribution. To other overnment aencies, I ask for your support. DTI s theme, Gettin Our Acts Toether underscores the need for reater coordination amon the various overnment aencies. The success of DTI s 3-Year Roadmap rests on our ability to work toether in support of our plans and prorams. To the private sector, I say, let us fore and maintain a stroner partnership. Obviously, overnment cannot do it alone. We reconize the private sector as the enine of rowth and remain committed to providin an environment where businesses can row and prosper. Craftin this roadmap had been a lon but rewardin process. So much talent and many years of experience were fused toether to see it throuh. Let us now all join hands to make these plans a reality. CESAR V. PURISIMA Secretary 2

3 EXECUTIVE SUMMARY Introduction Jobs. Stable Prices. Economic Growth. Those are the primary oals and objectives of Government. To ensure their accomplishment and actualization is the duty of the Department of Trade and Industry (DTI), an aency with the dual mission of facilitatin the creation of a business environment wherein participants could compete, flourish, succeed - and at same time ensurin the utmost welfare of consumers. The Plan and its Objectives DTI formulated this Plan to serve as a uide or roadmap for the next three years. A product of extensive consultation amon its elite corps of civil service professionals, it presents the suested priorities and action plans, which the Department must undertake in the achievement of its objectives. This Plan contains the strateies for the next three years ( ), with specific action plans for the First Year (July 2004-June 2005). In draftin the Plan, DTI adopted both a top-bottom, as well as a bottom-top approach, anchored on five strateic priorities, namely: Stable Prices and Consumer Welfare, Strateic Export Promotion, Sustainable Investments in Industries and Infrastructure, Support to Entrepreneurs and SMEs, and Service Environment and culture. Strateic Framework DTI s 3-year plan subscribes to a market-driven economic rowth, which harnesses the potential of MSMEs, promotes domestic and forein investments, and ensures consumers value for their money, throuh lobally competitive exports and industries and a bureaucracy that is committed to operational efficiency. Goals, strateies, and action plans for each of the aforementioned five strateic priorities are expected to contribute to the achievement of national oals of more jobs, sustained economic rowth, and an improved quality of life for every Filipino. 3 5

4 Policy Thrusts Amon the strateic priorities are recurrin themes that, overall, make up DTI s thrusts. As a uide, all aencies, bureaus, and corporations under the DTI shall, in line with their respective mandates, subscribe to the followin: Create more jobs by (1) creatin new entrepreneurs and enablin small, existin firms to become bier; (2) increasin investments in priority industries and developin infrastructure; and (3) expandin exports; Enhance and bolster the capabilities of lobally competitive enterprises that produce hih-quality products and offer first-rate services. Market development and investment promotion efforts shall be directed towards and focused on specific, identified sectors and projects; Intensify and be relentless in its drive to protect consumers, be expeditious in the resolution of consumer complaints, and be intensive and extensive in ensurin public awareness and understandin of issues and developments affectin the local market; Enhance, uprade, and enrich the country s business environment to attract more forein and domestic investments; Undertake a more focused and aressive export promotion campain to maintain and expand existin markets, as well as taret new and emerin ones; Accelerate the industry clusterin proram to harness, improve, and maximize the competitiveness of the country s products and services; Maximize export and investment opportunities throuh enhanced and improved international relations and partnership areements; Pump-prime the economy throuh substantial infrastructure development, packae and offer competitive incentives for infrastructure investments, and fast-track the completion of onoin and pipeline infrastructure projects; Maximize the Overseas Filipino Worker (OFW) sector as a trade promotion aent, channel of distribution, source of capital, network of business intellience, and in itself - as a market for Philippine products; 64

5 Espouse and enhance ICT utilization to reduce the cost of doin business, and reatly improve SME access to information; Initiate policy reforms and realin trade and industry laws with current economic developments, issues, and realities; Strenthen strateic alliances and partnerships with National Government Aencies (NGAs), Local Government Units (LGUs), and the private sector to facilitate the implementation of DTI s strateic plans and prorams; Develop a communications proram to: (a) promote the Philippines as an investment site and source of exports, (b) increase consumer awareness, and (c) inform the public about the Department s performance; and Work towards reater operational efficiency and effectiveness to improve overnance. A key element of the Plan is its call for reater and enhanced cooptation amon overnment bureaucracy. The Plan necessitates reater and smoother coordination by and between DTI and other aencies such as, but not limited to, the Departments of Ariculture (DA), Environment and Natural Resources (DENR), Forein Affairs (DFA), Interior and Local Government (DILG), Labor and Employment (DOLE), Transportation and Communications (DOTC), Public Works and Hihways (DPWH), and more important, the local overnment units (LGUs). Goals Consistent with the five strateic priorities and the Administration s 10-point aenda, the Department outlined its tasks and identified its oals as follows: 1. Help create 6-10 million jobs in the next six years a. Promotin entrepreneurship and developin MSMEs. With over 800,000 MSMEs today, the oal is to support and expand those existin enterprises in order for them to create and offer at least one additional job per MSME; 5 7

6 b. Generatin investments in infrastructure and priority industries, and expandin those already existin. The oal is to escalate domestic and forein investments by 30% in three years; c. Increasin exports of oods and services to boost the country s revenues. The oal is to reach the USD50 billion level by 2006 and USD60 billion by Our vision - to reach USD1,000 export per capita; 2. Double the level of public awareness on the Consumer Act in three years; ensure that 100% of manufacturers covered by Philippine National Standards (PNS) and 50% of retailers/ traders comply with the Consumer Act and Fair Trade Laws (FTLs) in three years; help maintain reasonable prices and supply availability of basic and prime commodities; resolve consumer complaints within thirty (30) calendar days from filin with the DTI; and develop and implement 7,000 Philippine National Standards (PNS) by 2007; and 3. Pursue ood overnance measures that improve service to the public. Reduction in processin time of DTI frontline services and the professionalization of the bureaucracy shall be the priorities. 68

7 Conclusion The Plan s underlyin theme of Gettin Our Acts Toether is a call for unity of purpose amon and between aencies in the bureaucracy. This is not a mere palliative. To move the economy forward, DTI needs support for its plans and prorams, particularly from the LGUs, which are the implementers of the Plan. Moreover, to push forward the economic aenda, DTI must assume a leadership role in pursuin a seamless bureaucracy. The role entails ettin the acts of overnment toether for it to follow a common tack. Specifically, DTI should start by enlistin the support of NGAs and LGUs, for their acceptance of and commitment to the Lon- Term SME Development Aenda, consumer welfare and protection prorams, and industry development activities. The oal is to see the prorams successfully implemented at the local level. Reducin poverty is the ultimate objective. This will be achieved by creatin jobs for the people and increasin the country s wealth. DTI s contribution lies in each of the five strateic priorities, namely: Stable Prices and Consumer Welfare, Strateic Export Promotion, Sustainable Investments in Industries and Infrastructure, Support to Entrepreneurs and SMEs, and Service Environment and Culture. With the steadfast support of the bureaucracy, Government shall attain its objectives of sustained economic rowth - and a better quality of life for each Filipino. 7 9

8 Introduction Gettin Our Acts Toether This Plan was desined to serve as a uide or roadmap for the DTI in the next three years ( ). A product of extensive and exhaustive consultation amon the Department s elite corps of civil service professionals, this Plan outlines the suested priorities and action plans that DTI should undertake to achieve its vision of prosperity for the country throuh a dynamic, thrivin economy characterized by lobal competitiveness, hand in hand with social responsibility. The DTI adopted a top-bottom, bottom-top approach to plannin, anchored on five strateic priorities namely, Stable Prices and Consumer Welfare, Strateic Export Promotion, Sustainable Investments in Industries and Infrastructure, Support to Entrepreneurs and SMEs, and Service Environment and Culture. Those strateic priorities represent the five hihest-impact opportunities that propel the Department to realize its mandate. DTI s Executive Committee came up with oals for each strateic priority, which the Groups later validated. The process called for a cross-functional participation (not based on structure) to allow an inter-play and exchane of ideas based on field-level experience and knowlede. What is doubly sinificant is the participation of the Reional Operations Group (ROG) representatives, who will eventually be the implementers of the Plan. 8

9 The Plan calls for reater cooptation amon overnment bureaucracies. The key to success lies in the reater and enhanced coordination between DTI, DA, DENR, DFA, DILG, DOLE, DPWH, and more importantly, the LGUs. DTI envisions its 3-year roadmap to serve as a uidepost. It subscribes to a market-driven economic rowth, which harnesses the potential of MSMEs, promotes domestic and forein investments, and ensures consumers value for money throuh lobally competitive exports and industries. Furthermore, the Plan is consistent with, supportive of, and is expected to contribute to the President s 10-point aenda on livelihood, education, fiscal strenth, decentralized development, and national harmony. Overall process in developin the DTI plan May May 14 June Articulate/ Revisit Vision Set Goals Articulate Strateies Develop Action Plans Develop Overlap Timetable Revalidate/ Present to Excom Develop Aency Work & Financial Plan What do we want to become or achieve? What will success look like in 3 years What will our tarets be to let us know we are successful? What specific prorams should we pursue to make our vision a reality? What plans and prorams must we undertake to implement our stratey? What will be done in 100 days, 1 year and 3 years? Are the strateies and plans acceptable to the Excom? What specific activities must we pursue to implement the Action Plan? What resources are needed to support the Plan? Leend: RESPONSIBILITIES EXCOM Groups Bureaus / Offices 9

10 Chapter 1 DTI and the 10-point Aenda The Administration s 10 Point Aenda is eared towards a vision of economic opportunity, social cohesion and democracy. It is an affirmation of the national policy which bean in 2001, and with a sinle focus -- the people, and a sinle ultimate objective -- freein the people from poverty within the decade. Essentially, the 10-Point Aenda can be broken down into five key development efforts, namely: 1. Livelihood; 2. Education; 3. Fiscal Strenth; 4. Decentralized Development; and 5. National Harmony DTI Framework PGMA s 10-Point Leacy Job Creation Good Government Social Justice and Basic Needs Education Enery Independence The Philippine Advantae Demoraphy Natural Endowment Location Export Investments Infrastructure SME COMPETITION ISSUES 12

11 DTI s contribution lies mainly in the area of livelihood where the followin oals were clearly set by the President: Create 10 million jobs in the next 6 years; Triple the micro financin beneficiaries from 1 million to 3 million MSMEs; and Develop 2 million hectares of land for aricultural business. This 3-year DTI Roadmap is eared to help attain these objectives. It is alined with the policy directions and tarets set in the aenda. Primarily, to create jobs, DTI shall: 1. Promote entrepreneurship and SME development (Chapter 2); 2. Promote investments (Chapter 3) and exports (Chapter 4); and 3. Promote investments and infrastructure (Chapter 3). In the area of Education, DTI shall strenthen NDC s Schoolbuildin Proram to help address the need for additional classrooms and contribute to the President s oal of 3,000 new classrooms each year. As part of DTI s ood overnment (Chapter 6) measures, and in the area of Fiscal Strenth, DTI shall adhere to the President s call to balance the budet. DTI shall spend only on thins that matter, shall adopt fiscal discipline, and shall endeavor to increase its operational efficiency to ensure the attainment of its strateic priorities. Included in DTI s action plan are support to the development of Subic and Clark as loistics hubs and the development of network of transport and diital infrastructure to connect the entire country. These oals form part of the President s priority towards Decentralized Development. Indeed, DTI is fully committed to the attainment of the oals set. Therefore, DTI shall alin its budetary and departmental prorams with the policy directions and tarets set by the President. At the same time, DTI shall continue to perform its other mandates such as enforcement of trade reulations and promotion of consumer welfare and advocacy (Chapter 5) to protect the Filipino consumer. 13

12 Chapter 2 Support to Entrepreneurship and SMEs ASSESSMENT AND CHALLENGES Small Business Corp. s Chair Zorayda Amelia Alonzo joins the roup discussion on Opportunities durin the session on SME Development. The roup points out the need to ive more teeth to laws and policies which will stronly promote SME rowth and development. Small and medium enterprises (SMEs) play a sinificant role in our country s development. They account for 99.6% of the country s total business enterprises (811,589), and enerate a 69.1% share of total employment. While SMEs provide more jobs compared to lare enterprises, they contribute only 32% of value added. Conizant of the importance of SMEs to economic development, the President approved in 2002 the National SME Development Aenda. The SME Aenda interated various SME development prorams such as financin, marketin and promotion, human resource development, product development, and advocacy into one enterprise development cycle. DTI s focus on SME development and promotion saw positive results. Throuh its flaship proram on financin, the SULONG or SME Unified Lendin Opportunities for National Growth Proram, Government was able to extend assistance to 281,229 SME-borrowers amountin to PHP26.8 billion in In 2003, some 25 SME Centers were re-activated to serve as one-stop shops for information and business counselin. One hundred forty six business counselors were trained extensively, and deployed to the SME Centers to provide advisory services as well as to assist SMEs in business plan preparation, improvement of marketin efforts, and entrepreneurial and skills development throuh trainin. In the area of policy advocacy, DTI closely worked with the DILG for the passae of Republic Act (RA) No. 9178, otherwise known as the Baranay Micro Business Enterprise (BMBE) Act of The BMBE Law aims to hasten the country s economic development by encourain the formation and rowth of baranay micro business enterprises and interate those in the informal sector into the mainstream economy. The law also provides the reulatory and enablin policy environment specific to micro enterprises, includin the rant of fiscal incentives throuh the LGUs. 14

13 Those ains, notwithstandin, there remain the twin challenes that need to be addressed, namely lobalization and technoloical chane. Throuh the Lon-Term SME Development Plan ( ), it is envisaed that those issues will be addressed and that the lonterm oal of increasin the contribution of SMEs as the primary enine of rowth will finally be attained. Goals DTI shall support the Administration s commitment to enerate 1.6 million jobs annually in the next three years, and to increase productivity with ross value added (GVA) contribution from 32% to 40% by 2007 or an equivalent 8.3% increase per annum. In line with the President s aenda, DTI is expected to: Support 3M entrepreneurs Triple SME lendin Strateies and Action Plans Improve access of SMEs to financin In 2003, the SME Unified Lendin Opportunities for National Growth (SULONG) Proram released a total of PHP26.8 billion to 281,229 SMEs, representin 35% of total SMEs in the country. In line with the Administration s call to increase further the number of SMEs assisted and to ensure the triplin of lendin in six years, DTI shall uprade the SULONG proram from a entleman s areement to a priority overnment financin institution (GFI) proram. By virtue of an Executive Order (EO), SULONG 2 will: a. Formalize the simplified loan qualification processin and approval rules adopted by the participatin GFI by ivin it the benefit of a Monetary Board imprimatur; b. Improve and institutionalize reportin and monitorin systems by adoptin a common database and reportin format amon participants; c. Provide incentives for SULONG loans iven by GFIs; d. Set interest rates at such levels comparable to loans iven to prime clients usin as base the risk-free interest rate plus a reasonable premium of 3%; and e. Provide appropriate performance rewards to SULONG contribution of GFIs. 15

14 DTI shall also initiate the establishment of an SME Credit Bureau with mandatory participation of GFIs and the private bankin sector by way of sharin SME credit information and statistics. It shall promote the development of local credit ratin services by settin a timetable for requirin a credit ratin for SMEs for licensin purposes. It shall also review the feasibility of an off-the-board SME Exchane as a means of mobilizin equity funds for SMEs. Introduce, implement and localize the National SME Development Plan in partnership with LGUs and alliances with NGAs, Business Support Oranizations (BSOs), and non-overnment oranizations (NGOs) The SME Development Plan ( ) is a six-year strateic development plan eared towards buildin up the capabilities of Philippine SMEs. The Plan consists of a three-year rollout period, an evaluation and re-prorammin process in between tracked by another three-year intensified proram. One of the key elements to ensure success for the lon-term SME development aenda is the acceptance and support of LGUs and other aencies, private or public. To create buy-in for the Plan, DTI shall fore strateic alliances with LGUs to help develop and finalize the local SME development plan. Advocate a policy environment conducive to SME development DTI shall review all laws, policies, and reulations pertainin to SMEs to ensure that there is no conflict, and that they are contributory to SME rowth and development. Amon the laws to be reviewed is the Mana Carta for SMEs specifically the provision on mandatory lendin to SMEs. DTI shall also elevate BMBE implementation concerns to the Cabinet for immediate resolution. Improve the business environment To ensure an environment conducive to SMEs, DTI shall promote the operationalization of the One-Stop Action Center (OSAC) for business reistration nationwide. The OSAC will provide a comprehensive service delivery to would-be entrepreneurs and a more responsive oranization to address SME concerns. It shall also house all information on various laws, rules, and reulations overnin SMEs and conduct of business in the Philippines, includin available assistance. Intensify capability buildin and entrepreneurship development amon SMEs, business oranizations, and educational institutions 16

15 Because of the proven effectiveness of Business Counselors (BCs), DTI shall expand their trainin to LGUs. BCs provide eneral counselin and advisory services to SMEs, such as but not limited to, business plan preparation, improvin marketin efforts, and arranin for trainin. They will be composed of volunteers from professional oranizations who will donate their time and expertise in assistin SMEs with more in-depth, specialized advisory services. At present, DTI BCs are deployed throuhout the priority 25 SME Centers that were selected to be iven priority assistance and support under the National SME Development Aenda. Develop an entrepreneurship proram for Overseas Filipino Investors (OFIs) and their dependents To maximize OFWs as sources of capital, DTI shall conduct entrepreneurship prorams for OFWs, Filipino mirants, and their dependents. Those entrepreneurship prorams shall cover aspects needed to transform OFWs into Overseas Filipino Investors (OFIs). Those aspects include: (1) promotin entrepreneurship and investin, (2) promotin savins, (3) preparin to start a business and to invest, and (4) manain the business or investments. Increase SME access to information on business opportunities, financin, and other relevant data Usin IT as a tool, DTI shall harmonize existin databases in order to come up with an interated SME database. DTI shall launch the SME portal to provide SMEs - with access to the Internet - relevant information on marketin, financin, and other data requirements. Institutionalize the SME Development Aenda in DTI and in the bureaucracy DTI must put in place a stable framework for development and implementation of SME development policies, prorams, and strateies consistent with the elements of the SME Development Aenda. DTI, throuh the SME Development (SMED) Council, shall initiate buy-in for the Lon-Term Development Plan and obtain commitment from each aency for its implementation. In the immediate term, DTI shall effect the implementation of Department Order 132 creatin and definin the functions and authorities of the SMED Group. To prepare for the lon term, DTI will introduce the rationalization of overnment oranizations and technical support institutions for SMEs under a sinle authority (SME Development Authority). 17

16 Chapter 3 Sustainable Investments in Industries and Infrastructure ASSESSMENT AND CHALLENGES Undersecretary Elmer Hernandez presents the priorities enunciated by Secretary Cesar V. Purisima as well as the DTI oals on investments, which became the basis of the roup s discussion throuhout the session. Industry rew by an averae rate of 2.9% in , contributin a hefty 32% to the country s ross domestic product (GDP). From a low rowth of 1.9% due to the effects of 9/11 and the lobal economic rowth in the minin sub-sector, with the first recorded production of crude oil and natural as from the Malampaya Deepwater Gas to Power Project and the continued improvement in old and copper minin. In 2003, industry s performance paced down to 3% on account of the slower rowth of the minin and the electricity, as and water subsectors coupled by the contraction of the construction sector. Manufacturin sustained its rowth, fueled mainly by the steady increase of food manufactures, furniture and fixtures, basic metal industries, products of petroleum and coal, and chemicals and chemical products. Meanwhile, construction contracted further in 2003 due to the much bier drop in public construction, as the overnment continued to reduce expenditures on capital outlays to contain the budet deficit. While investments in private construction continued to row, those were not enouh to offset the slack in public construction. In 2002, investments in the Board of Investments (BOI) and the Philippine Economic Zone Authority (PEZA) declined by 64.75% from year ao due to the perception of the country as a hih security risk area, on account of the Abu Sayyaf incidents and the Al Qaeda links, compounded by postponement of investment decisions in ASEAN prior to the full implementation of the ASEAN Free Trade Area - Common Effective Preferential Treatment (AFTA-CEPT). Intensified efforts to address investor worries in the areas of labor, immiration, bureaucracy and red tape, security and peace and order, taxation, and tariff paid off as approved investments increased durin the 1st quarter of 2004 to PHP billion from PHP11.08 billion a year ao or an equivalent of 1,071.98% increase. 18

17 Despite aressive efforts to sustain investments in the country and spur the rowth of the industry sector, several challenes need to be addressed. Government must create a conducive business environment by developin measures and action plans to attract more investors in the country, and keep them here. There is also a need to mitiate the hih cost of doin business, such as power rates. Meanwhile, aressive investment promotion campains must continue to be pursued in hih rowth areas such as IT-enabled services. Goal DTI s oal is to raise investments in industries and infrastructure by 30% in three years. Strateies and Action Plans Rationalize the Incentives System In offerin incentives to investors, DTI strives to balance the need to promote the country as an investment site and to protect the country s revenue base. Efforts will be made to simplify and rationalize the system, takin into account the operations or mandates of all aencies currently rantin incentives. DTI shall initiate amendments to the Omnibus Investments Code (EO 226). The EO needs revision to further rationalize the incentives system by introducin fiscal and administrative amendments and harmonizin the overnment s administration of prorams and policies on the rantin of fiscal and non-fiscal incentives. Moreover, it will also help make the incentives more competitive compared with the Asian neihbors. Revitalize the minin industry DTI has identified the minin industry as amon the priority industries that will be iven focused assistance and support because of its potential to attract bi investments. Minin experts estimate the country s mineral deposits at around USD1 trillion. With proper support, it is expected that a resurent minin industry will contribute to much needed export revenues. 19

18 In 2002, the minin industry contributed PHP33 billion in production value, PHP15.3 billion in value added contribution, or 1.5% of the GDP, USD519 million in exports or 1.5% of total Philippine exports, PHP356.3 million in paid-up investments, PHP2.2 billion in taxes and fees, PHP5 billion in waes and benefits, and provided more than 100,000 direct employment. To initiate the effort, DTI will finalize the roadmap prepared by a technical workin roup composed of representatives from the BOI, DENR-Mines and Geosciences Bureau (DENR-MGB), Chamber of Mines of the Philippines, Natural Resources Development Corporation, and other representatives from the private sector. DTI will fast-track implementation of the memorandum of areement (MOA) it sined with DENR-MGB to process pendin applications. DTI and DENR will ensure that only environmentally compliant projects will be approved and that they have the support of communities where they intend to locate. Focus on hih-end, hih-value investments such as electronics and motor vehicles Electronics. DTI shall support industry direction to increase hiher-value activities, e.., test equipment and process development, packae and product desin, eventually leadin to chip desin and fab process development. This shall be achieved throuh development of desin capability, increase of supplier base, addressin infrastructure concerns, and brandin. The taret is to achieve USD34.5 billion in exports in 2007 from markets such as US, Europe, Japan, Taiwan, and ASEAN. DTI shall support product focus on electronics manufacturin services (EMS) and oriinal desin manufacturin (ODM). Motor Vehicles. With the issuance of E.O. 156 in 2002, it has become the overnment s policy to develop the Philippines as the manufacturin hub in ASEAN for certain motor vehicles, parts, and components. DTI will continue to do that. DTI will intensify the promotion of the Automotive Export Proram (AEP). To achieve the industry taret of 250,000 units by 2007, DTI will implement the industry roadmap by strenthenin the automotive policy environment, implementin productivity and competitiveness prorams, addressin industry value chain aps, and providin export incentive prorams. 20

19 Aressively promote the Philippines as provider of services in IT, medical tourism, ecotourism (Palawan) and loistic hubs (Subic and Clark) Consistent with DTI s stratey of promotin services exports and focusin only on specific areas and sectors, investment promotion and industry development activities shall be undertaken on IT-enabled services particularly the five priorities: Customer Contact Centers, BPO (Administrative, Finance, and Accountin, HR Services); Software Development Services; Medical Transcription (includin Conversion); and Animation (both educational/business and entertainment). DTI will formulate and implement the medical tourism business plan to jumpstart the investment promotion campain. DTI will seek Presidential support and approval to declare Palawan as an eco-tourism zone and provide certain incentives for the private sector to invest in infrastructure development and other support facilities. Consistent with PGMA s thrust to develop Subic and Clark as the best international service and loistic centers in the reion, DTI will aressively pursue the provision of the necessary infrastructure support that can be done by both overnment and the private sector Create the Philippine Infrastructure Corporation (PIC) To address one of the major investor issues, i.e., lack of infrastructure due to limited overnment budet for massive infrastructure development, the DTI shall work for the creation of the Philippine Infrastructure Corporation (PIC). The PIC shall be a wholly-owned overnment corporation under the National Development Company (NDC) with a corporate life of at most ten (10) years whose main purpose is to jumpstart infrastructure projects. The proposal calls for the transfer to the PIC of the most valuable assets of the Philippine Government, includin shares of stocks and real property currently under the name of the national overnment and other overnment instrumentalities and overnment-owned and/or -controlled corporations (GOCCs). These assets will be securitized, i.e., throuh the issuance of PIC bonds. The DTI shall push for the accreditation of PIC bonds as reserved eliible and ari-ara compliant. There will be at least two tranches: the first should raise about PHP20 billion and the second around PHP180 billion. 21

20 Fast-track completion of onoin/pipeline infra projects The DTI, throuh the PIC shall pursue infrastucture projects that are expected to spur further economic activity as businesses will be able to take advantae of the economic opportunities to be made possible by additional public facilities: 1. Southern Taalo Arterial Road (STAR) 2. South Luzon Expressway Extension (SLEX) Project Rehabilitation of the 1.1-kilometer Alaban Viaduct Project (TR-1) Construction of the 7.8-kilometer two-lane wide shoulders for the Calamba, Launa to Sto. Tomas, Batanas (TR-3) of the SLEX 3. The Palawan Tourist Zone 4. North-South Hihway on the eastern side of Luzon 5. La Union-Bicol Railway 6. Batanas Port/Road 7. Cebu/Neros/Panay expressway 8. North and South Food Terminals 9. Cebu Convention and Exhibition Center in Mactan 10. Power Plants Packae competitive incentives for infra projects To accelerate and increase investments in infrastructure development, DTI shall review the incentives packae provided by our Asian neihbors as a first step. Intensify investment retention, expansion, and diversification campain In order to enhance the country s investment promotion proram, DTI will aressively pursue the Retention, Expansion, and Diversification (RED) Proram to encourae the rowth and stability of local businesses. It aims to retain, broaden, and deepen the workin relationship with existin forein investors to persuade them to strenthen and expand their present activity and increase the rane of activities they undertake at a particular location, to make it less vulnerable to relocation. It also intends to enerate new leads by usin existin investors as ambassadors to influence their supplier companies to consider co-location. Moreover, it aims to develop the supply chain linkaes with forein investors and increase the level of local inter-tradin. DTI shall seek resolution to key problems identified by the private sector. The issues include cost of power, infrastructure, labor, and peace and order situation, amon others. 22

21 Boost investment eneration and servicin capability of all investment promotion aencies (IPAs) in partnership with the private sector DTI will fore strateic alliances with industry representatives, the academe, and other overnment aencies to improve investment eneration and client servicin. Proram-specific activities such as the onoin academe-industry partnership proram of the motor vehicle, electronics (Electronics HR Development Proram) and ICT (Skills Enhancement Proram for the Contact Center Industry) industries shall be encouraed. Initiate policy reforms Aside from amendments to EO 226 to rationalize the incentives system, DTI will also initiate the amendments to the followin investment related laws: n RA 7718 (BOT Law). Amendments are needed to strenthen the BOT Law to attract private investments in infrastructure development. Specifically, the amendments will address, amon others, the (1) lenthy approval process; (2) unclear policies on overnment support, risk allocation, and determination of reasonable rate of investment return; (3) lack of fund for preparation of pre-investment studies; and (4) weak linkae with the Commission on Audit (COA); n RA 9814 (Government Procurement Reform Act). RA 9814, incorporatin all leal provisions overnin procurement (infrastructure works, oods/supplies and services) into one streamlined law, shall be amended to further reduce the time to complete the biddin process, widen competition amon qualified bidders, and provide for a level playin field amon bidders that will better facilitate an efficient procurement system in overnment and further eliminate corrupt practices; n RA 4566 (Contractors License Law). Amendments to RA 4566 are necessary to ensure the relevance of the provisions indicated in the law. Likewise, there is a need to ive more teeth for thorouh enforcement of the law; n n Presidential Decree (PD) 1096 National Buildin Code to require all buildin officials and inspectors to be licensed to ensure that safety standards are met durin buildin inspection; and PD 1746 creatin the Construction Industry Authority of the Philippines (CIAP) to increase the effectiveness of the authority and propose a trainin levy fund for construction laborers to help retool the country s skilled construction workers. 23

22 Tap the OFWs as sources of investments DTI, throuh NDC, shall explore the issuance of OFW bonds as savins and investments for overseas Filipinos. Address investor confidence DTI, as the forefront in investments promotion, shall help address the neative perception brouht about by conflicts in policy betweenthe executive, leislative, and judicial branches of overnment. DTI shall ensure that it is actively involved in focused client servicin, particularly for strateic infrastructure projects. 24

23 Chapter 4 Strateic Export Promotion ASSESSMENT AND CHALLENGES Undersecretary Thomas G. Aquino sets the direction for the session on Exports. He stressed the Government s role in helpin exporters deliver the needs of the international market. Globalization, characterized by open, freer, but more competitive markets, is a challene that the Philippines, alon with other countries, faces today. The country has taken a firm but cautious stance in the past. Today, DTI reconizes only too well that it should not fully embrace unbridled liberalization but instead face the leitimate challene of international competitiveness. Overall, export fiures appear positive. Total Philippine exports rew from USD32.2 billion in 2001 to USD35.2 billion in In 2003, merchandise exports rose to USD36.2 billion, up 3% from yearao level. Further, the Philippine export mix has shifted from resource-based to manufactured products. Sinificantly, the Philippines and China became the fastest rowin exportin countries of manufactured products, with an averae rowth rate of 16% per year, for the past 10 years. Philippine export rowth for the period was also driven by Asian markets, which posted double-diit rowth rates and compensated for the slowdown in demand from the country s traditional markets like the US, Japan, and the Netherlands. That phenomenon indicated that the country s export markets have expanded beyond the traditional areas, and that the country is now exportin more to alternative markets. On the other hand, the trend also indicated that the Philippines was losin out to competitors in the US market. The rowin interation of the Philippines in world trade brins about both benefits and perils. On one hand, the lobal economy offers a bier market for Philippine products. The country is becomin more competitive in electronics and semiconductors exports. In 2003 alone, electronics and semiconductor exports accounted for 66.3% of total merchandise exports, from only 34.3% in This hihlihted the potentials of electronics as a vehicle for export rowth. 25

24 On the other hand, the country s export earnins continue to be sensitive to fluctuations in the lobal electronics market, posin risks to rowth in the comin years. For instance, the 27.8% decrease in semiconductor and electronics microcircuits exports in 2001 resulted in a decline in total exports. Conversely, the increase in electronics exports in 2002 resulted in export rowth. Thus, in 2002, the DTI adopted the brand manaement approach. Supported by the Philippine Export Development Plan for , the DTI identified 10 revenue streams or product sectors based on the followin criteria: (1) market-based; (2) included in previous lists of export winners; (3) excluded from those assisted by non-dti aencies; (4) without stron national representation; (5) with rowth potential; and (6) where DTI can make an impact. The 10 revenue streams are (1) food, (2) marine products, (3) construction materials, (4) home furnishins, (5) iftware and holiday décor, (6) motor vehicle parts and components, (7) microelectronics, (8) IT and IT-enabled services, (9) wearables, and (10) oranic and natural products. Focused promotional activities were undertaken to promote those sectors in the world market, while focused initiatives were developed in product and standards development, and in policy support. DTI has likewise used the international trade arena to pursue reater market access while at the same time nurture local industries that need more time to adjust to lobal competition. Philippine participation in bilateral and multilateral neotiations has also proven fruitful. For instance, the country s successful neotiation for the reduction of tariff for Philippine tuna in the European market auurs well for tuna exporters and allied packain industries, particularly in preservin thousands of jobs in Mindanao. Greater access of Philippine products to forein markets was also successfully neotiated. The areements fored with Taiwan, Vietnam, and Thailand are expected to boost various products such as processed foods, electronics, arments and oil, and natural as. Bilateral talks with non-traditional markets, e.., Austria, India, China, and other Eastern European countries were also held. In addition, the enhancement of tradin schemes with other ASEAN countries, such as the ASEAN Industrial Cooperation Scheme (AICO) was continued while free trade areements (FTAs) with China, Japan, and India are also bein pursued. 26

25 The need to increase the country s export of oods and services cannot be over-emphasized, in liht of the country s aim to attain hiher economic rowth as a poverty reduction scheme. This can be achieved by expandin our supply base, tappin new markets, and expandin existin ones, diversifyin our products, and maximizin opportunities throuh bilateral and multilateral areements. Goals DTI hopes to achieve a per capita export level of USD1,000 - a level that by World Trade Oranization (WTO) standards is comparable with developed economies. The Department s taret, in the medium term, is to attain USD50 billion in export receipts by 2006 and USD60 billion by DTI shall work towards chanin the export landscape to reflect an increase in the share of non-traditional merchandise and service exports vis-à-vis major exports such as electronics. At present, 69% of total merchandise exports are made up of electronics, arments, and machinery and transport equipment, while 31% are non-traditional exports such as furniture, food, automotive parts, home furnishins and holiday décor, amon others. By end of 2007, the oal is to see an expansion of our major, non-traditional merchandise export base and services export by 30% or an annual rowth of 10% for the next three years. Strateies and Action Plans To achieve the USD60-billion export taret in 2007, the followin strateies and action plans shall be pursued: Promote services exports and nurture the capabilities of lobally competitive enterprises that produce hih quality products To counter stiff lobal competition, DTI shall focus on specific areas or sectors by capitalizin on the Philippines inherent advantae in terms of people, natural resources, and location. It shall ive priority to the promotion of IT-enabled services, i.e., Call Centers, Business Process Outsourcin (Administrative, Finance and Accountin, HR Services); Software Development Services; Medical Transcription (includin Conversion); and Animation (either educational or business, and entertainment). 27

26 Estimated worldwide spendin on BPO services alone was valued at USD712 billion in In fact, IDC projects the worldwide BPO market to row to USD1.2 trillion by Other service exports include construction (project manaement), medical tourism, and enineerin desin services. To expand the country s non-traditional merchandise exports, DTI resources will focus on the revenue streams. Those sectors have rowth potentials and an increasin market base. Conizant of the importance of market information, DTI will optimize the use of trade information for effective business matchin and stratey enablement of exporters. Undertake a more focused and aressive export promotion campain to maintain and expand existin, as well as taret new and emerin, markets DTI will take advantae of the estimated USD150-billion Halal market to increase the country s food exports. It will seek the intervention of the President to declare Southern Mindanao as a Halal Food Production Area, and to implement the Halal Certification process so that the Philippines can tap at least 1% of the lobal Halal trade,estimated at USD1.5 billion per year. The Department will also enhance the utilization of the OFW sector, estimated at 7.4 million workers, as trade promotion aents, channels of distribution, sources of capital, network for business intellience, and as a market for Philippine products. To ensure efficient use of resources within the bureaucracy, DTI will implement an interated export promotion plan for each priority sector or product. The Plan, to be jointly prepared by the Business Development Teams, shall adopt a focused approach by identifyin taret companies in each major and new market. Enhance/improve market access throuh participation in bilateral and multilateral neotiations DTI shall continue to advance Philippine interests throuh bilateral and multilateral neotiations. It shall take advantae of export opportunities under the ASEAN Priority Interation Proram (ASEAN PIP) particularly for electronics where the country serves as the ASEAN coordinator, and automobiles. DTI shall initiate Mutual Reconition Areements (MRAs) on electronics, motor vehicles, food, and services. 28

27 Similarly, the Department will maximize export opportunities offered by trade areements such as the Japan-Philippines Economic Partnership Areement (JPEPA). And in reconition of the absolute need for private-public sector collaboration, DTI will call for the formation of a Free Trade Areement (FTA) Advisory Group to assist durin consultations as prerequisites to neotiations. Improve the business environment to make it more conducive to exporters To create a policy environment conducive to exports, DTI shall push for the amendment to RA 7844, otherwise known as the Export Development Act of 1994 in order to make it more responsive to developments in the world market. DTI shall also initiate the repeal of Presidential Decree (PD) 930 and E PD 930 provides for the simplification of export procedures and documentation by realinin functions and commodity reulatory aencies. EO 1016, on the other hand, sanctions the withdrawal of commodity export clearances except for some, which are covered under international areements, quota restrictions, or those that are endanered species or under protected areas. Althouh the Export Development Council (EDC) is currently reviewin the implementin rules and reulations (IRR) of PD 930, export procedures may be further simplified if a thorouh review and amendment to the PD itself is made. To reduce the cost of doin business, DTI s priority shall be to further simplify and streamline export and import procedures includin accreditation, licensin, or reistration. DTI, in cooperation with the Bureau of Customs (BOC) and PEZA, shall also fully implement the Automated Export Documentation System (AEDS) to facilitate processin of export documentation and information. DTI shall also expand the One-Stop Export Documentation Centers (OSEDCs) as a way of streamlinin procedures for export. The OSEDCs will include the BOC, Philippine Ports Authority (PPA), and the different Government Commodity Offices (GCOs) to facilitate the application, processin, and approval of export documentation in just one locale. Moreover, the Department will intensify the use of IT to provide timely and accurate market business intellience information. 29

28 Accelerate industry clusterin proram For exports to flourish, domestic trade linkaes must be improved to facilitate the flow of oods and services. Thus, several clusters were identified in all the reions and provinces under the Philippine Export Development Plan. DTI shall validate these industry clusters and accelerate the proram to enhance competitiveness. Amendments to the Local Incentives Code will be advanced to provide the necessary environment for the development of support and incentives proram for export-oriented clusters in specific sectors. Pursue a country brandin proram to promote the Philippines as a source of quality and competitive products Crucial to the country s efforts as an exportin nation is its positive imae as a quality producer, reliable supplier, and product and service innovator. An interated marketin approach may be the key in the short term but sustainability is the overarchin oal. A stron partnership between DTI and the private sector needs to be fored to ensure that Philippine exporters contribute to this positive imae. DTI shall utilize the Forein Trade Service Corps (FTSC) and the international media to promote the Philippines as a source of excellent products. To support this, DTI shall initiate a Values Campain for Exporters - to instill the ideals necessary to achieve a positive reputation as an exportin nation. Strenthen strateic alliances and partnerships with the export sector, business support oranizations, other overnment entities, and embassies/forein trade offices to address the proper valuation of exports and imports, thereby increasin revenues DTI shall enhance coordination with the export sector particularly with other overnment aencies, embassies, and forein trade offices to maximize the eneration of export and import statistics in taret markets. Throuh its alliances, DTI shall proactively participate in the Inter-Aency Committee on Trade Statistics of the National Statistical Coordination Board (NSCB), which also includes the National Statistics Office (NSO) and Banko Sentral n Pilipinas (BSP), in order to come up with a harmonized export and import data. To support this, there is a need to review the value of exports declared by exporters specified in the Export Declaration Forms submitted to DTI to ensure proper valuation of export and import information. 30

29 Chapter 5 Stable Prices and Consumer Welfare ASSESSMENT AND CHALLENGES DTI s campain to protect consumers and to ensure value for their hard-earned money has enerated outstandin results. Undersecretary Adrian S. Cristobal, Jr. opens the session on Consumer Welfare and Protection. He focuses on four areas of intervention needed and asks the participants to concretize them into oals, strateies and action plans. In the past three years, DTI succeeded in ensurin price and supply stability, notwithstandin the challenes that had heavy lobal and domestic impact, namely, the Iraq war, the onslauht of Severe Acute Respiratory Syndrome (SARS), the Oakwood mutiny, steady peso depreciation vis-à-vis the US dollar and oil price hikes. The establishment of an efficient monitorin system; the conduct of reular dialoues with consumers, manufacturers, traders and retailers; and the effective use of media campains have improved the level of consumer welfare and awareness in the country. The parallel dru importation proram, Presyon Tama, Gamot Pampamilya is a noteworthy example, as it aims to make low-priced but hih-quality medicines more affordable for consumers, especially for low-income Filipinos. Meanwhile, existin structures were also strenthened. The National Price Coordinatin Council (NPCC), which seeks to formulate policies on price stabilization and to address price movements, was reularly convened. The Consumer Welfare Desks (CWDs), found in major retail establishments, were created to accept, review, and resolve consumer queries and complaints. The Consumer Advocates Club (CAC) amon DTI employees, which is desined to install an efficient system for information dissemination and feedback on consumer-related issues, was also established. Still another sinificant contribution to consumer welfare and protection was the re-launchin of the Bantay Bilihin Proram early this year to ensure proper and prompt complaints manaement, and to implement an aressive price monitorin system. Furthermore, the Department chaned its Consumer Hotline to 7510-DTI or for easier recall. Consumer complaints are now sent and received electronically, either throuh sendin a text messae to 2DTI or 2384 for SUN subscribers and 2920 for Globe and Smart subscribers, or throuh by accessin the DTI website, which features the i-reklamo online facility. 31

30 The Department has also been relentless in enforcin trade reulations. The liquefied petroleum as (LPG) recall, Private Emission Testin Center (PETC) accreditation, and the implementation of safeuards and anti-dumpin measures were some of the concrete steps undertaken to ensure the full implementation of trade laws. In addition, DTI collaborated with the Securities and Exchane Commission (SEC) and private sector oranizations to crack down on pyramidin and other et-rich-quick schemes. Intensively undertaken and pursued was the inspection of locally manufactured and imported oods, to monitor compliance with the prescribed standards, and thus ensurin consumer safety. Measures to protect the local manufacturers from unfair competition posed by imported products were likewise put in place. With these achievements as the backdrop for a new roadmap, DTI commits to continue the fulfillment of its mandate of protectin consumers and ensurin value for their money. The new DTI Plan aims to build on past ains and institutionalize breakthrouhs, and to focus on increasin competencies to ensure the successful realization of the Department s mandate. Goals For the next three years, the DTI Consumer Welfare and Trade Reulation Group aims to attain the followin oals: 1. Double the level of public awareness of the Consumer Act; 2. Ensure that 100% of manufacturers covered by Philippine National Standards and 50% of retailers/traders comply with the Consumer Act and FTLs; 3. Help maintain reasonable prices and availability of supply of basic and prime commodities; 4. Resolve consumer complaints within thirty (30) calendar days from filin with the DTI; and 5. Develop and implement 7,000 PNS by

31 Strateies and Action Plans To ensure the attainment of the five-proned oals on consumer welfare and protection, the followin strateies and action plans shall be adopted and implemented: 33 Advocate consumer welfare awareness amon LGUs and NGAs (linkaes and partnerships) The Department shall partner with LGUs and empower them to act on consumer issues. DTI shall harness LGU participation by forin an areement with DILG for LGUs to be pro-active in promotin consumer welfare and implementin FTLs. The Department shall set up CWDs in LGUs in all cities (115) and 1st class municipalities (130) to build the capabilities of local executives on consumer laws. To measure the public s level of awareness of the Consumer Act, the DTI shall commission a survey. This shall be followed with quarterly surveys to determine the proress, especially the ains made by the advocacy efforts of the DTI in this reard. DTI will seek closer collaboration with the Department of Education (DepEd)/Commission on Hiher Education (CHED) to enhance the curriculum on consumer education and standards and encourae student s participation in various consumerrelated events. DTI shall also maximize the use of media to educate the public on consumer protection. Furthermore, DTI media releases shall be more proactive and systematic. Strenthen consumer oranizations, and include other sectors of civil society, e.., labor, women, church-based roups, etc. to expand present network of advocates DTI shall fore areements with national oranizations, coalitions and federations with correspondin areements on the local level, e.., local chambers, etc. Aside from strenthenin consumer oranizations, DTI shall expand its consumer advocates network to include other sectors of civil society such as women, reliious and church-based roups, public utility operators and drivers associations, labor federations, farmers roups, and youth roups, (e.., student councils). Instead of creatin new oranizations, the approach will be to enhance relations and networkin with existin oranizations. DTI shall undertake walkin tours to strenthen consumer awareness, to cover the Bureau of Product Standards (BPS) Testin Laboratory, Bureau of Food and Drus (BFAD), and manufacturin facilities.

32 Develop a Communications Plan to address consumer welfare issues particularly risin prices To increase public awareness on issues affectin the consumers, particularly risin prices, the DTI shall draft, refine and implement a Communications Plan. The Plan should identify key messaes to assure the public and to warn manufacturers aainst unscrupulous pricin. It shall also aim to inform the public about measures bein undertaken by Government to ensure the availability of affordable products. The advocacy efforts shall also include the review, refinement, and implementation of policies toward the sustained celebration of the Consumer Month. Use IT to increase consumer awareness DTI shall create a consumer portal linked to its trade and investments portal to make available consumer welfare and protection-related information on the Internet. It shall compile consumer-related best practices as well as consumer alerts from other countries and make such information available to the eneral public. The existin hotlines, text, and Internet consumer information and assistance services shall also be interated into one comprehensive system. Conduct an aressive campain to educate business sector on its responsibilities toward consumers The Department shall educate business on FTLs, product liability and warranty reulations to heihten awareness on its responsibilities toward consumers. To encourae compliance of firms, DTI shall shift to a more proactive developmental method from a reulatory approach. The campain shall also involve strenthenin of existin CWDs in 2,000 retail establishment. Likewise, CWDs in 2,000 additional retail establishments, 400 companies holdin Product Standards (PS) licenses, and 100 companies holdin Import Commodity Clearance (ICC) certifications will be set up. Intensify and expand prorams that ensure affordability and availability of critical commodities e.., medicines, pandesal, etc. DTI shall strenthen existin prorams and launch new initiatives that aim to directly provide the public critical commodities at affordable prices. Prorams that directly provide quality medicines at low prices such as the Presyon Tama, Gamot Pampamilya shall be sustained as well as the Pinoy Pandesal Project, which provides quality pandesal for as low as P1. Likewise, the implementation of the Bantay Bilihin Proram shall be accelerated. 34

33 Determine effective points of intervention in the entire supply chain The DTI shall review the entire supply chain of basic commodities to determine points for effective intervention. To ensure stable supply, special importation of critical commodities shall be supported. The Local Price Coordinatin Councils (LPCCs) in key cities shall be utilized to ensure smooth flow of oods. The Department shall also institutionalize a mechanism for dialoues with various manufacturers, traders, retailers, and other overnment aencies throuh the NPCC to keep prices at reasonable levels. Establish a simplified, speedy and impartial DTI-wide redress mechanism for consumers DTI shall resolve at least 80% of pendin cases as of June 30, 2004 durin the first 100 days. A DTI-wide standard and uniform redress system shall be developed by releasin a DTI manual for simplified adjudication system and creatin an online dispute settlement system. Efforts shall also include introducin Improvements to the existin i-reklamo. The Department shall also develop a comprehensive and synchronized monitorin and enforcement system to effectively monitor and enforce existin consumer-related laws. Review and update consumer-related laws, policies, and reulations DTI shall review existin consumer related laws to attune/alin consumer and trade reulation policies to developmental trends and strenthen oranizational mechanisms (systems, procedures, structures) for effective policy implementation. These laws include RA Consumer Act; RA Standards Law; and RA Business Name Law, amon others. Enhance competence of DTI field staff, particularly on leal matters DTI shall focus on improvin the skills and competence of local field officers, particularly in the areas of mediation and adjudication. A pool of trainers shall be developed amon the CWTRG and ROG. The empowerment of DTI field staff shall also involve desinin simpler procedures, includin leal documentation. 35

34 Develop, adopt, and implement standards To achieve the 7,000 PNS by 2007, DTI shall implement the Philippine Standardization Stratey and harmonize PNS on toys, home appliances, and CFC-free products with international standards,includin products under the APEC/ASEAN priority list. The DTI shall institutionalize Standards Blitz prorams as part of standards promotion and information dissemination. To meet the mandatory requirement of the EU and US markets, DTI shall intensively promote the Hazard Analysis Critical Control Point (HACCP) accreditation scheme includin the settin up of a system accordin to ISO/IEC Guide 58 and ISO/IEC Guide 65. Likewise, it shall enforce and monitor nationwide coverae of priority products like LPG, plywood, steel bars, electrical, and electronics. These actions will result in improved build-up standards and conformity. The Department shall also spin off inspection of PETCs to reconized inspection bodies for accreditation to ISO/IEC The DTI shall also pursue the amendment of the Philippine Standards Law in partnership with the PPSQF and other industry federations. Maximize benefits from international areements and expand our strateic network and alliances with international bodies The DTI shall join Consumer International and other worldwide consumer oranizations to open up and maximize opportunities from strateic network and alliances with international bodies. These efforts shall include enterin into areements for mutual reconition of results and certificates issued by Philippine accredited laboratories and certification bodies. Throuh the FTSC, DTI shall collect consumer-related best practices, as well as consumer alerts, from all over the world A new system to process international information will also be set up for DTI and the eneral public to learn from the issues. 36

35 Chapter 6 Service Environment and Culture ASSESSMENT AND CHALLENGES Dir. Ma. Lourdes Baua leads the discussion on DTI strenths which it can count on to attain its oal of bein the epitome of Good Governance in the Bureaucracy. The United Nations Development Proramme (UNDP) defines overnance as The exercise of political, economic, and administrative authority to manae a nation s affairs. It is the complex of mechanisms, processes, relationships, and institutions throuh which citizens and roups articulate their interests, exercise their rihts and obliations, and mediate their differences. It further identified leitimacy, accountability, transparency, efficiency, and effectiveness, respect for human rihts, rule of law, fairness, predictability, participation, corporate social responsibility, and responsible citizenship as criteria. In the Philippine bureaucracy, overnance has become more pronounced in recent years and the DTI leadership has always emphasized upradin the quality of overnance by makin it a major thrust of the Department. Lately, it has been called The Aency of Choice. That the Department acknowledes itself as such is not without basis. Last year, DTI was ranked amon the top overnment aencies positively perceived by both the business sector and the eneral public. In surveys conducted in 2003, the Makati Business Club (MBC) placed DTI as the 4th most trusted overnment aency. Similarly, the Social Weather Station (SWS) reported that DTI ranked number five (5) in its survey on the perception of overnment performance. The Department consists of 11 bureaus, 10 attached aencies, 6 corporations, 16 reional offices, 81 provincial and area offices, 26 forein trade offices, and 10 services offices, and over 4,000 officials and staff. While it consistently enjoys a very positive or hih public perception, unfortunately that is not the case with reard to resources. In 2003, DTI ranked 24th amon national overnment aencies in terms of budet. Operatin on a measly PHP2 billion annual budet, the DTI had to contend with limited funds, thereby impedin the implementation of plans and prorams for eneratin investments, increasin exports, creatin jobs, and protectin consumers. 37

36 Goals DTI envisions itself as the epitome of ood overnance. Its oals are to sustain its rank as one of the most trusted overnment aencies, and be the best aency in terms of public perception of performance. Strateies and Action Plans To achieve these oals, DTI will implement the followin strateies and action plans: Reduce processin time of frontline services and strive for service excellence DTI shall focus on improvin service delivery. It shall conduct a systems review of critical and major frontline services, such as the Business Name reistration, Product Standard licensin, clients complaints handlin, trade inquiries, and BOI reistration. The objective, amon others, is to reduce processin time and increase the quality of the Department s services. DTI shall identify areas and processes for International Oranization for Standardization (ISO) standard s launchin. This shall involve appointin Quality Manaement Representatives (QMRs) to set up the Quality Manaement System (QMS) units, conduct of trainin, auditin, and other activities necessary to make the identified areas and processes ISO-alined. A DTI Manual of Operations must be developed consistin of the various processes and services offered by the various aencies and bureaus. Apply e-governance in DTI This stratey is intended to automate the critical functions and services of DTI that will facilitate implementation of its prorams, shorten the turn around time and improve business. Existin computerized and electronic services will be continuously improved, such as the Web-enabled Business Name Reistration System (WeBNRS). DTI shall also finalize and implement the DTI Information Systems and Strateic Plan (ISSP). 38

37 Institute and strictly maintain a performance manaement scorecard as a tool to increase operational efficiency DTI shall institute and strictly maintain a manaement performance scorecard both on an individual and oranizational level. With this scheme, the bureaus and aencies will be imposed accountabilities and demanded for evidence. Each DTI office shall review its respective performance indicators and set areas of measurement based on the followin: n n n n Quality - How well service is delivered; Quantity - How much or how many are processed; Cost - How much is needed to implement the plans; and Timeliness - Are the plans and activities on schedule. At the same time, DTI shall develop incentive packaes and reward system for ood performers to sustain effectiveness and encourae others to perform as well or even better. Fore strateic alliances and increase DTI-LGU collaboration DTI shall work closely with the private sector and increase collaboration with LGUs. DTI shall also facilitate the interation of all business-related processes within the overnment. It will endorse and support the implementation of a Philippine business reistry system that will compile all business related information for use by the various overnment aencies. Generate additional funds either from external or internal sources to help fund DTI Plans, Prorams, and Activities DTI will exercise fiscal prudence and ensure allocative efficiency (spendin only on thins that matter) to internally enerate funds necessary for hih-priority projects and activities. It shall promote resource complementation to maximize the utilization of existin resources within the Department. DTI shall also enerate additional funds by focusin on revenueeneratin projects to increase its income which shall be used to finance expenditures. DTI shall, at the same time, aressively seek fundin support throuh official development assistance (ODA) sources. It shall also tap special funds such as the Ariculture and Fisheries Modernization Act (AFMA) funds to support DTI prorams. 39

38 Review the DTI mandate and implement measures to improve delivery of services As a vital first step, DTI shall conduct a review of its mandate to identify necessary improvements. A benchmarkin study shall be initiated to document best practices. DTI shall propose amendments to EO 133, creatin the DTI, to rationalize the Department and improve its efficiency and responsiveness. Communicate aressively to the public DTI services and performance Public service is a public trust. In order to manae people s expectations, there is an urent need to keep the public well informed on the mandate, services, best practices and accomplishments of the Department. Conizant of the need to build the hope and trust of the people, DTI shall communicate success stories that inspire and motivate. It shall convey existin systems and procedures in a clear and visible manner. DTI shall prepare and implement an interated Communications Plan, takin into account the use of various media (radio, TV, print, and Internet) and other existin fora, where DTI-related information may be expressed. Implement and enhance the DTI employee welfare proram Human resource is one of the more critical factors that account for overnance. DTI reconizes that reality, for which reason the Department shall implement and enhance its employee welfare proram. Bein considered for inclusion in the packae are (1) monetary benefits, e.., performance-based cash awards, hazard pay, car plan, and housin plan, and (2) Non-monetary, e.., reconition awards, staff houses, etc. DTI will pursue the objective of DTI Under One Roof or the Buildin Proram and initiate the completion of the Trade, Industry, and Investments Center. DTI shall also encourae employees to oranize employees cooperatives to help members in their needs and provide additional sources of income. 40

39 Institutionalize the DTI Human Resource Development Proram to enhance skills and competencies of DTI officials and staff Hand in hand with providin improved welfare benefits for its employees, DTI shall implement and institutionalize an aency wide Human Resource Development Proram based on competency and life-learnin skills. Access to short-term scholarships for deservin employees will also be increased to help them avail themselves of specialized studies. In line with this, work performance of candidate employees shall be monitored to ensure qualification in the proram. Results of the trainin and studies will be evaluated for their impact on the beneficiary and the concerned aency. Succession plannin will likewise be employed particularly in critical positions. This will allow the Department to harness potential leaders and maintain the level of service expected. Realin trade and industry related laws to economic realities DTI shall review existin laws relatin to trade and industry in order to assess their effectiveness and identify how they may be revised to be more relevant under existin realities and conditions. Additional laws will also be proposed to improve service delivery. 41

40 Chapter 7 DTI Leislative Aenda DTI Officials deliberate on Consumer Welfare and Protection concerns. DTI implements several laws on trade and industry includin those datin back to the Commonwealth period but remain in effect until today. Recent history shows that since 1998 Conress has passed 12 new laws that aim to harmonize trade and investment policies with our international commitments. In particular, they are eared to work alon WTO policies, institute safety nets to address issues on liberalization and lobalization, address concerns pertainin to sustainable development/environment, promote the use of ICT and support MSMEs, amon others. As we move towards creatin a stable environment to foster the development of MSMEs, attractin more investments, makin exports more competitive, and ensurin consumer welfare and protection, there is a need to review all existin laws and realin them to economic realities. DTI has therefore set a leislative aenda for consideration by Conress. DTI shall propose to Conress, mostly amendments to existin laws, to increase and improve the delivery of overnment services and address investment related concerns. Enactment of these proposed laws will undoubtedly contribute to the attainment of national oals. 42

41 Chapter 8 First Year Action Plan The DTI Action Plan identifies the activities, plans, and prorams that the DTI should undertake in the first year. It shows the timeline and responsible units within the DTI. Assistant Secretary Arlene Mendoza facilitates the session on SME development, where the participants focus on the need for stron collaboration with the civil society and other overnment entities especially the local overnment units (LGUs) to achieve their oals. The activities are consistent with the strateic priorities defined and which make up the Department s Policy Thrusts. As a uide all aencies, bureaus, and corporations under DTI shall, in line with their respective mandates subscribe the followin: Create more jobs by (1) creatin new entrepreneurs and enablin small, existin firms to become bier; (2) increasin investments in priority industries and developin infrastructure; and (3) expandin exports; Enhance and bolster the capabilities of lobally competitive enterprises that produce hih-quality products and offer first-rate services. Market development and investment promotion efforts shall be directed towards and focused on specific, identified sectors and projects; Intensify and be relentless in its drive to protect consumers, be expeditious in the resolution of consumer complaints, and be intensive and extensive in ensurin public awareness and understandin of issues and developments affectin the local market; Enhance, uprade, and enrich the country s business environment to attract more forein and domestic investments; Undertake a more focused and aressive export promotion campain to maintain and expand existin markets, as well as taret new and emerin ones; Accelerate the industry clusterin proram to harness, improve, and maximize the competitiveness of the country s products and services; Maximize export and investment opportunities throuh enhanced and improved international relations and partnership areements; 43