Philippines among the highest users of trade agreements in ASEAN

The Philippines was among the countries in ASEAN including Cambodia, Indonesia, and Thailand with high utilization rate of preferential trade agreements in 2010, latest data from the ASEAN Secretariat showed.

Philippine utilization rate rose to 41.15 percent, a marked increase from the 20 percent utilization rate in the 2008 survey of the Asian Development Bank (ADB).

The increase showed that the Department of Trade and Industry (DTI)’s key program Doing Business in Free Trade Areas (DBFTA) program is gradually making an impact and encouraging more firms to use the FTAs.

“Clearly, capturing data on the utilization of our FTAs is an important step to assess the impact of our trade policies. Have we created more jobs? Are we making a dent on the social development goals of creating jobs and eradicating poverty?” said Trade and Industry Secretary Gregory L. Domingo.

The trade department is also working closely with different government agencies, including the National Statistics Office (NSO) and the Bureau of Customs (BOC) to develop a harmonized system of capturing the country’s data on the utilization of preferential trade agreements and address issues on improving the business environment.

Increasing FTA utilization is among the core strategies identified in the Philippine Export Development Plan (PEDP).

Data from the National Statistics Office (NSO) showed that majority of Philippine exports went to these FTA markets as of November 2011: Japan, 18.44 percent; China, 12.62 percent; Korea, 4.57 percent, and countries in ASEAN such as Singapore, and Thailand, 13.02 percent.

DTI said they will conduct more in-depth sessions on preferential trade agreements to service the needs of our exporters.

The business information sessions are also opportunities to get feedback from the ground and for the government to continuously review and strengthen capacity building programs for firm-level competitiveness.

For 2012, the DTI targets 100 information education sessions with various industries across the country.

Last year, over 7,000 exporters and decision makers from the private sector and government joined the DBFTA program.

Already, a number of exporters have been expanding their business in the country’s FTA markets.

KLT Fruits, Inc., manufacturer of tropical fruit purees, is tapping farmers and farmers’ cooperatives in Cavite, Batangas, Quezon, and Tarlac to meet increased orders for tropical fruit purees from FTA markets such as Korea, China, Japan, Australia, and New Zealand where tropical fruit purees enjoy zero or reduced tariffs.

Victor Marasigan, plant manager of KLT Fruits, Inc., said, “As we foresee increased demand for food exports in FTA markets, we are working with the farmers to plant more fruit trees such as passion fruits, mangoes, guyabano, and guava among others to cater to the demand.”

KLT Fruits Inc. is based in Cavite and employs 200 workers which go up to 600 employees during peak orders.

Exporters from other sectors like furniture are also utilizing the FTAs to diversify their markets.

Cebu-based rattan manufacturer Obra Cebuana whose traditional market is the United States has diversified by shipping 70 percent of its exports to Philippine FTA partners.

Philippine Exporters Confederation (PhilExport) has earlier mentioned optimism on stronger exports in 2012 brought about by increased business awareness on the country’s FTA markets.

In 2011, 78 DBFTA sessions were held in key cities of the country as well as in Tokyo, Japan and Auckland and Wellington in New Zealand to target importers.

Also, 154 trainers were trained by the DTI’s Philippine Trade Training Center (PTTC) in Metro Manila and Cebu for the DBFTA information sessions.

The DTI also partnered with business organizations including customs brokers, embassies, local associations, and universities to widen its network of participants.

Since 2010, the DTI has been conducting the DBFTA nationwide supported by the Tariff Commission, Bureau of Customs, and private sector business organizations. (PNA)