Is the leisure sector ripe for a rebound?

February 22, 2022 | 12:01 am

Beach-tourism — BW FILE PHOTO/ KOALA CRUZ

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Colliers Philippines is starting to see green shoots of recovery in the hotel and leisure segment. Many Filipinos are raring to spend and travel after two years. But the questions remain, are these growth indicators enough to enable the sector to regain lost ground? How has the segment evolved? And will local and foreign tourists’ preferences change as a result of the pandemic?

Data from the Philippine Statistics Authority (PSA) showed that spending in the restaurants and hotels segment grew by 5.1% in 2021 from a 43.1% contraction in 2020. Meanwhile, the gross value added (GVA) for land, water and air transport saw a turnaround with an average growth of 3.5% in 2021 from a 39.3% drop in 2020. The easing of mobility restrictions has also propelled hotels and other tourism establishments’ operations due to larger operating capacities.

Previously, Colliers noted that recovery in the hotel segment is likely to be driven by domestic travel, followed by corporate travel, extended leisure with the easing of international travel restrictions, with Meetings, Incentives, Conferences and Exhibitions (MICE) activities recovering the slowest. Projections from International Air Transport Association (IATA) show that the domestic travel demand is likely to reach 93% of pre-COVID levels in 2022 while international travel demand will likely reach 44% of pre-pandemic level this year.

While the demand for international travel remains sluggish, the Department of Tourism (DoT) shifted its efforts to reviving local tourist destinations such as Palawan, Cebu and Boracay. The department also ramped up its vaccination drive to inoculate workers from various tourism-related industries. As of the end of 2021, about 282,780 workers or 88% of the 325,489 workers have been inoculated against Covid.

The results from our Q4 2021 Property Briefing Survey showed travelers’ preference to visit local tourist destinations once the government lifts all travel restrictions. Travelers are likely to visit beaches as 47% of those surveyed chose Palawan as their top destination, followed by Boracay (33%).

To prepare for the anticipated rebound in demand, Colliers Philippines has provided some recommendations on how hotel operators and other tourism stakeholders can maximize the pent-up demand and kickstart recovery:

REPURPOSE FACILITIES INTO PRIVATE OFFICES AND FLEXIBLE WORKSPACES
Traditional and outsourcing firms’ implementation of alternative work schemes has enabled hotel operators to be agile with their services. For one, some hotel brands have started to convert and repurpose their facilities into private offices and flexible workspaces provided that they comply with the government-mandated health and safety protocols.

Colliers believes that demand for these facilities is likely to grow, given that more firms are willing to implement remote work schemes. Hotels also do not require long-term lease obligations while offering round-the-clock services and on-site amenities to guests. During our Q4 2020 Briefing survey, 66% of the respondents said that they are willing to work in a hotel room converted into a co-working/flexible workspace.

IMPLEMENT STAFF TRAININGS AND REFRESHER PROGRAMS
Informing staff of the new protocols and guidelines in cleaning practices in common areas and hotel rooms, proper food and beverage (F&B) etiquette and maintaining sanitary food preparation. Colliers believes that these will ensure a seamless, efficient, and safe hotel experience for guests under the new normal.

INTRODUCTION OF HYBRID MICE
One of the segments hardest hit by the pandemic is the MICE industry. In our view, hotel operators and other tourism stakeholders should look at the viability of implementing hybrid MICE events or a mix of physical and virtual participants. We believe that this should partly buoy the MICE segment which heavily suffered due to limited face-to-face events.

Surprisingly, about 57% of the respondents during our Q4 2021 briefing said that they are now willing to attend a face-to-face event or convention in a five-star hotel while 43% said otherwise. This is an improvement from our Q2 2021 survey result in which 80% of our respondents said that they are still not confident to attend face-to-face events.

Overall, we see the hotel sector gearing up for a rebound. The gradual easing of local and international travel restrictions and improving vaccination rates should shed light on the leisure sector’s recovery. While the pandemic has changed the way people interact and live, the hospitality and tourism segment must respond, prepare and look ahead to be able to thrive in a post-COVID environment.

Alfonso Martin L. Aguila is a senior research analyst at Colliers Philippines. He covers office, residential, leisure, retail, and industrial sectors.

Pro league takes a break while FIBA window in play

February 22, 2022 | 12:01 am

Leg 2 of PBA Second Conference 3×3 set for March 5-6

PBA 3×3 Second Conference Leg 1 winner TnT and its rivals get more buildup time for the next battle with the league taking a break this week while the FIBA international window is in play.

“Leg 2 of the Philippine Basketball Association (PBA) 3×3 will be set on March 5 and 6, Saturday and Sunday,” PBA 3×3 chairman Dicky Bachmann said.

The pro league is giving way to the Smart Araneta Coliseum’s hosting of the International Basketball Federation (FIBA) World Cup Asian Qualifiers games from Feb. 24 to 28.

After holding the games at the Big Dome, the PBA has booked its Governors’ Cup on Wednesday to Sunday hostilities at the Ynares Center in Antipolo City for this week.

Tomorrow’s double-header featuring Alaska versus NLEX and San Miguel Beer against Phoenix marks the first PBA games there since TnT and Meralco played the deciding game of their Governors’ Cup semifinal series on Dec. 23, 2019.

The three-a-side hoopfest, which holds matches in the mornings, won’t be following the 5×5’s Ynares-Antipolo swing. Instead, the PBA 3×3 will join the Governors’ Cup when it returns to the Quezon City venue in early March, taking its old weekend slot.

The PBA 3×3 kicked off its second tournament over the weekend with 13 teams, including debuting guest squad Master Sardines, in a spirited fight.

Tropang Giga crew Almond Vosotros, Samboy de Leon, Lervin Flores and new recruit Rey Mark Acuno reigned supreme, beating Meralco in the first leg finale, 21-19, to cap an unbeaten run.

“First leg pa lang ito; kailangan pa namin magtrabaho to be a better team sa mga susunod,” said Mr. De Leon. — Olmin Leyba

Entertainment News (02/22/22)

February 22, 2022 | 12:01 am

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Mike Sandejas, Francis Reyes on Muni-Muni Stories

ON EPISODE 8 on the 2^nd season of the Muni-Muni Stories podcast, film director Mike Sandejas and musician Francis Reyes discuss the film Tulad Ng Dati (2006). The film blends fiction and biography to dramatize the life of the OPM band The Dawn. The movie charts the band’s struggle to make the dream of having a new hit come true. The film also honors rock icon and The Dawn guitarist Teddy Diaz, who passed away in 1988. The film’s director, Mr. Sandejas, and the band’s current guitarist, Reyes (also a DJ, podcast host, and music journalist) reflect on the titular song, gaining new meaning in the interval between then and now. The second season of Muni-Muni Stories, a podcast co-produced by Filipinas Heritage Library and Podcast Network Asia, features many heavyweights in the film and music industries talk about official soundtracks (OSTs) in Pinoy movies. Muni-Muni Stories Season 2 is exclusively available on Spotify. For updates, follow Filipinas Heritage Library and Podcast Network Asia on Facebook, Twitter and Instagram.

Sustainable wooden toy brand opens LazMall store

A PURVEYOR of wooden toys for children, Tooky Toy Philippines officially opens its first flagship store in LazMall on Feb. 23. Tooky Toy started with a dream to make the best wooden toys possible. The brand looks for innovative and creative ways to take ordinary objects and turn them into timeless and durable wooden toys. From material to production, all toys are manufactured using eco-friendly processes in every step of production. All Tooky Toy have met and, in most cases, exceed the strictest international toy safety standards. Each Tooky Toy is made of wood from sustainable forests, using only organic pigments, water-based dyes, and non-formaldehyde glue, so every Tooky Toy tea set or musical toy is made not only with the safest standards for the environment, but for children too. Tooky Toys are categorized as: Pretend Play, Educational, Push & Play, Music, Infant, and Puzzle. There will be limited edition and launch-exclusive bundles and Tooky Toys at LazMall on Feb. 23. For more information visit www.tookytoy.ph.

TBA joins Yuchengco’s inaugural online film fest

TBA STUDIOS will showcase some of its critically acclaimed works at Yuchengco Museum’s first online film festival. Beginning Feb. 22, viewers can watch a variety of titles from renowned directors as well as up-and-coming student filmmakers for free, during the seven-day online film fest called Y2M (Yes2Movies), which will run until Feb. 28. The films will be available on yfilms.ph, a digital platform for access to quality local movies. Among the TBA Studios titles in the festival are the historical epic Heneral Luna, quirky romcom I’m Drunk, I Love You., award-winning drama Women of the Weeping River, romantic film Write About Love, and TBA Studios’ latest, Habambuhay: Remembering Philippine Cinema. In addition, the Y2M filmfest will also show five films from this year’s batch of student films (features and shorts) from CineMapua. Schools and students nationwide are encouraged to submit their films for archiving in Yuchengco Museum’s yfilms.ph website. Y2M is available globally and will be accessible 24 hours a day for free on the yfilms.ph website.

Clara Benin joins Spotify’s EQUAL campaign

A MONTH ahead of International Women’s Day, Filipino singer-songwriter Clara Benin landed on a Times Square, New York billboard as part of Spotify’s EQUAL Campaign. The global campaign, an initiative of the music streaming platform to amplify the work of outstanding women and gender-nonconforming musicians, turned its spotlight on Benin as this week’s cover artist of Spotify EQUAL Playlist in the Philippines, with two of her songs, “blink” and “Araw’t Gabi,” occupying the top two slots. “I feel really humbled to be featured on a Times Square billboard in New York and to have my songs be part of Spotify’s EQUAL playlist alongside these lovely and talented women,” Ms. Benin said in a statement. “I really hope our music reaches and inspires more people from all over the world.” Having amassed more than 30 million streams on Spotify, Ms. Benin is the first Filipino signed under Sony Music’s OFFMUTE, a Southeast Asian record label. Ms. Benin recently released “blink,” which was produced by electronic/indie artist The Ringmaster, and features Gabba Santiago on drums. The song is available to stream on all digital music platforms via OFFMUTE.

Eddie Benjamin releases new single

AUSTRALIAN singer-songwriter, producer, and instrumentalist Eddie Benjamin introduces his upcoming debut album with new single, “Weatherman.” A defiant call for optimism in troubling times, the singer imbues his message of hope with old-school soul. “Weatherman” is out now on all digital music platforms worldwide.

Saweetie and H.E.R. collaborate on single

GRAMMY-nominated star Saweetie teams up with R&B artist H.E.R. on a new single, “Closer.” The two Fil-Am stars also released the song’s music video on Feb. 15. In the music video, directed by Hanna Lux Davis, Saweetie and H.E.R. go on a trip around the world, with Saweetie stopping at Paris, Tokyo, and the Philippines. Listen to “Closer” on ICY/Warner Records at Saweetie – Closer (feat. H.E.R.) – Single (lnk.to).

Stranger Things returns in May

NETFLIX’S Stranger Things returns for its fourth and final season with Volume 1 premiering on May 27, and Volume 2 on July 1. When the new season starts, it has been six months since the Battle of Starcourt, which brought terror and destruction to Hawkins. Struggling with the aftermath, the friends are separated for the first time — and navigating the complexities of high school hasn’t made things any easier. Since its release in 2016, the global phenomenon Stranger Things has garnered over 65 award wins and 175 award nominations, including those from the Emmys, Golden Globes, Grammys, SAG, DGA, BAFTA, the People’s Choice Awards, MTV Movie & TV Awards, and many others. Stranger Things is created by The Duffer Brothers and is produced by Monkey Massacre Productions and 21 Laps Entertainment.

GMA comedy show features Guinness World Records

GMA NETWORK presents its newest comedy infotainment program, THE BEST KA! Featuring Guinness World Records Best of the Best, hosted by Mikael Daez. The program includes the stories of world-record holders and also features local individuals and their remarkable traits or achievements. The show airs every Sunday, 3:50 p.m., on GMA Network.

Sparkle introduces new love teams

GMA NETWORK’S talent management arm’s first project for the year in January was the launch of Sparkle’s “Next Brightest Stars for 2022.” This month, Sparkle introduces five love teams: Kyline Alcantara and Mavy Legaspi, Sofia Pablo and Allen Ansay, Althea Ablan and Bruce Roeland, Shayne Sava and Abdul Raman, and Zonia Mejia and Jamir Zabarte. The duos will be starring in upcoming shows on GMA.

DoubleDragon plans offering of $75-M bonds in SGX

February 22, 2022 | 12:01 am

DOUBLEDRAGON Corp. said its wholly owned offshore unit DDPC Worldwide Pte. Ltd. is planning to conduct a Registration S tap offering of its bonds listed at the Singapore Exchange Securities Trading Ltd. (SGX-ST).

“DoubleDragon seeks to increase [the] diversification of its funding sources as it prepares itself to grow its business operations inside and outside the Philippines over the long-term,” the company said in a disclosure on Monday.

DDPC Worldwide engaged UBS AG Singapore Branch to arrange a series of fixed-income investor calls starting on Monday.

The company said a Registration S tap offering of DDPC Worldwide’s outstanding $75-million senior guaranteed notes due 2025 with a 7.25% rate “may follow, subject to market conditions.”

“Any bonds issued pursuant to the Tap Offering will be consolidated with and increase the outstanding principal amount of DDPC Worldwide’s existing listed maiden USD Bonds listed on the SGX-ST,” DoubleDragon said.

The company said proceeds from the tap offering will be used to refinance certain obligations, repay short-term credit facilities, and fund DoubleDragon’s Hotel 101 expansion, and for general corporate services.

Last week, DoubleDragon said its Hotel 101 Worldwide Private Ltd. is preparing to launch its first hotel project outside the Philippines. It is planning to acquire the first property for development in Asia by the second quarter of this year, which will then be launched by the second half of 2022.

On Monday, shares of DoubleDragon at the stock exchange went up 1.37% or 14 centavos to close at P10.38 apiece. — Keren Concepcion G. Valmonte

Amendments to PDIC charter seen to strengthen local banking system

February 22, 2022 | 12:01 am

THE PASSAGE of a bill amending the Philippine Deposit Insurance Corp. (PDIC) charter will strengthen the country’s banking system as it will improve its coordination with the regulator and streamline its operations.

“This move is logical considering that the PDIC deals with deposit insurance for banks and the BSP (Bangko Sentral ng Pilipinas), as the country’s central bank, sets the monetary policy and has financial supervision over the banks. This will result in better coordination between the two bodies,” Senator Juan Edgardo M. Angara, the author and sponsor of the bill, said in a statement.

Under the reconciled version of the amendments currently awaiting the signature of President Rodrigo R. Duterte, the agency’s supervision will be transferred to the BSP from the Finance department. The governor of the BSP will serve as the chairperson of the PDIC board, while the Finance secretary, who previously served as ex-officio chairperson of the board, will act as the vice-chairperson.

Mr. Angara, who chairs the Senate Finance Committee, said this was done to ensure the collaboration between the two agencies becomes more efficient, and to prevent the possible overlapping of their functions.

Some products and arrangements of Islamic banks under the PDIC, in accordance with Republic Act 11439 or the law providing for the regulation and organization of Islamic Banks, are also included in the amendments.

The PDIC may also establish separate insurance funds and arrangements in consideration of Islamic banking rules.

Mr. Angara said the PDIC will continue to insure deposits of at most P500,000 but once the bill is passed, the board may increase the maximum deposit insurance coverage to an amount indexed to inflation or in consideration of other economic indicators as deemed appropriate. The PDIC board is mandated to review the maximum deposit insurance coverage every three years.

Bank records may only be examined if there is a finding of fraud or unsafe banking deposits, he said.

The PDIC may also convert the assets of the closed bank to cash once a bank is under receivership. The amendments also allowed the selling of these assets to a Financial Institutions Strategic Transfer Corporation in accordance with current laws.

“Our hope is that with these amendments to the PDIC charter, we help strengthen and make more resilient our banking sector, which will most definitely play a critical role in the coming years as we try to recover in the wake of the pandemic,” Mr. Angara said. — A.N.O. Tan

How PSEi member stocks performed — February 21, 2022

February 22, 2022 | 12:00 am

Here’s a quick glance at how PSEi stocks fared on Monday, February 21, 2022.

Philippines slips in labor resilience ranking

February 22, 2022 | 12:00 am

Next admin urged to make major budget commitment to housing

February 21, 2022 | 10:26 pm

SOCIALIZED HOUSING needs to be a budget priority for the next government after the current funding emphasis on transportation and public works projects, the head of a social policy institute said.

The average share of housing in the national budget between 2016 and 2022 was about 0.3%, Institute for Leadership, Empowerment, and Democracy Executive Director Zy-za Nadine Suzara said at a webinar on Thursday, while infrastructure projects usually account for nearly a quarter of the government’s spending plan.

The last time the government gave the housing sector 1% of the national budget was in 2016, in response to shelter needs after Typhoon Yolanda, she said. The housing budget as a share of government spending had since declined.

“Malaki ’yung pangangailangan, so hindi pwede maging dahilan ng NHA at ng iba pang housing agencies na hindi nila kayang gumastos. Kasi kung ba-budget lang ’yung DBM ng sa kaya nilang gastusin, papaano nila mapupunan ’yung pagkukulang para dun sa urban poor communities? (Demand is huge, so the National Housing Authority and other housing agencies cannot say that they cannot spend. If the Department of Budget and Management only gives them a budget based on what they can spend, how can they fill the needs of urban poor communities?),” she said.

According to her analysis, P292 billion of the 2022 national budget has still been allocated to local projects — such as roads and bridges — despite the planned devolution of local infrastructure projects this year.

To address the problem, she said socialized housing needs to be included in the government’s broader infrastructure program and take a larger share of fiscal space.

The government, which funds housing for the police and the military, should be able to fund support for informal settlers in dangerous areas, Ms. Suzara added.

“There is a need to prioritize the most marginalized in the pipeline of programs.”

Terry L. Ridon, convenor of infrastructure think tank InfraWatchPH, said via messenger that funding for social housing in the past two administrations plateaued at a rate that cannot address the backlog adequately.

“A new administration should decisively resolve this by exponentially raising the funding for the housing sector,” he said on Monday. “Correspondingly, the absorptive capacity of agencies to implement this increased funding should be improved to ensure no wastage of funds.”

The Department of Human Settlements and Urban Development last week reported that the government produced and financed over a million housing units from 2016 to 2021. — Jenina P. Ibañez

Int’l air cargo, mail volume surged by over 70% in 2021

February 21, 2022 | 10:25 pm

INTERNATIONAL CARGO and mail volume handled by air carriers servicing the Philippines grew over 70% by volume in 2021, mainly due to strong demand for goods needed to deal with the public health crisis, according to the Civil Aeronautics Board.

International cargo and mail traffic handled by air carriers in 2021, both outgoing and incoming, amounted to 372.7 million kilograms (kg), from 218.8 million kg in 2020.

Incoming cargo and mail flown in last year by air carriers was 191 million kg, up 70.5%.

Air carriers handled 181.9 million kg of outgoing cargo and mail in 2021, up 70.3%.

All Nippon Airways was the Philippines’ leading air carrier for international cargo and mail with total traffic of 31.1 million kg, followed by Qatar Airways (28 million kg), Eva Air (27.7 million kg), Philippine Airlines (27.2 million kg), Air Hongkong Ltd. (26.7 million kg), Korean Air (25.1 million kg), and Federal Express (20.6 million kg).

The International Air Transport Association (IATA) said in its air cargo market analysis for December 2021 that airlines in Asia Pacific struggled with a “lack of capacity, down 17.1% in 2021 versus 2019,” or before the pandemic.

“Demand for goods made in the region was nevertheless strong, including for PPE (personal protective equipment) in November and December,” it noted.

The IATA also said that international CTKs (cargo tonne-kilometres) in the Asia-Pacific region increased by 3.6% in 2021 compared with 2019, and by 8.8% in December.

Globally, the IATA said that “strong demand allowed world goods trade to increase by around 9.8%” year on year last year.

“Air cargo growth was twice as strong than the rebound in trade, exceeding this by 8.9% percentage points, a typical pattern during economic upturns,” it added. — Arjay L. Balinbin

Rice tariffication repeal campaign tops farmers’ agenda as review nears

February 21, 2022 | 10:24 pm

FARMERS will press the next government to repeal the Rice Tariffication Law, claiming that it has made little to no progress in meeting its objective of improving farmer prosperity after three years.

“We are ready to discuss with the future administration to look at the problems and work on what needs to be done… None of (the law’s) promises were fulfilled. There was a drastic and recurrent drop in farmers’ incomes and farmgate prices,” National Manager of the Federation of Free Farmers Raul Q. Montemayor said in a virtual briefing.

“There were only minimal gains for consumers, no significant improvement in farmers’ productivity, cost of production, and competitiveness, as well as flawed packaging and poor implementation of adjustment and relief measures for farmers,” he added.

The law, which is in the books as Republic Act No. 11203, liberalizes rice imports, which used to be heavily regulated, with most foreign rice brought in via government-to-government deals. Instead, the law allowed private parties to import with fewer restrictions, though importers needed to pay a tariff of 35% on grain brought in from Southeast Asia.

The tariffs supplied P10 billion a year to the Rice Competitiveness Enhancement Fund, which was designed to kickstart the industry’s modernization.

Tugon Kabuhayan convenor and former Bureau of Fisheries and Aquatic Resources Chief Asis G. Perez said the law is approaching its three-year review period.

“With its automatic review (coming up), we want to know if the annual P10-billion rice fund is being spent, according to the law, which says that 50% should go to rice farm machinery and equipment; 30% to rice seed development, propagation, and promotion; 10% for expanded rice credit assistance; and another 10% to rice extension services. Specifically, we want to know if this allocation should be revised based on what our rice producers really need,” Mr. Perez said.

Mr. Montemayor said that the law did not provide enough cash assistance and instead drove up production costs.

“We estimate that for the first three years, the total loss for farmers was at P66 billion. The cost of producing palay (unmilled rice) went up… Cash assistance is only a band-aid solution to the problem. The government gives P5,000 per hectare and free seed, but it doesn’t fix the broken system that we have. There is a disconnect between the disease and the remedy,” Mr. Montemayor said.

The groups want the new government to reduce reliance on imports and focus on supporting farmers.

“We have to aim for self-sufficiency and stop relying on imports. Our country’s food security depends on our farmers but our government allows our farmers to be harmed first before they do anything about it,” the Magsasaka at Siyentipiko para sa Pag-unlad ng Agrikultura Regional Coordinator Rowena A. Buena said.

The farmers also sought an online database to track fund use from the tariffs generated by the law.

“We don’t know where all that money is going, or if it is being used properly. (The law) didn’t improve the lives of our farmers. We already know that this law failed. Future implementation… will not help. Give our rice farms the proper support and technology. Stop ignoring the problems,” Ms. Buena said.

Mr. Montemayor said the government should also invest in post-harvest facilities, establish alternative marketing systems, promote crop and income diversification, strengthen crop insurance and climate and price risk mitigation, and encourage participation and support of local government units.

“Three years ago, our position towards the law was to review the policy first. Now, looking at how it affected our farmers, we want this law to be (repealed). It did not fulfill any of the promises made. Not all farmers received assistance… The money is not being distributed to everyone. It went to the pockets of government officials. It went to a small minority of farmers who belong to organized groups. Individual farmers received nothing,” said Rene Cerilla, Legal and Policy Advocacy Officer of Pambansang Kilusan ng Samahan ng Magsasaka.

“Our government should be alarmed by the current situation. Majority of our farmers are old. There are no more young farmers to replace them because they see no future in farming. It won’t be long until these farmers start selling their lands. These lands will not be used for agricultural purposes. This is a threat to our nation’s food security. We cannot rely on Vietnam or Thailand for our food. If there is a shortage in these countries, we will be in trouble. We have to produce our own,” Mr. Cerilla added. — Luisa Maria Jacinta C. Jocson

Government nonfinancial assets valued at P1.9 trillion

February 21, 2022 | 10:23 pm

THE government’s nonfinancial assets have been valued at P1.9 trillion at the end of 2021, growing by P361 billion, the Department of Finance (DoF) said.

The DoF, in a statement on Monday, said its registry contains 380,817 separate assets, including roads, bridges, hospitals, power plants, and irrigation facilities.

These items are registered under the Bureau of the Treasury’s (BTr) National Asset Registry System (NARS).

“We will continue to expand the coverage of the NARS to improve the oversight and management of nonfinancial public assets,” National Treasurer Rosalia V. de Leon said.

The additional P361 billion represents 5,819 assets, mostly listed under the Transportation department and its agencies.

“Several acquired properties forfeited in favor of the government were endorsed to the Privatization and Management Office for disposition,” the DoF added.

The BTr launched the NARS in 2017 in an effort to monitor and manage the National Government’s assets.

NARS supports the National Indemnity Insurance Program, which covers government assets that are at risk due to typhoons, floods, earthquakes, and volcanic eruptions.

The Treasury is working to upgrade the system in partnership with the World Bank and the Japan International Cooperation Agency. — Jenina P. Ibañez

‘Strategic goods’ exports in 2021 valued at $4.5B

February 21, 2022 | 10:22 pm

EXPORTS of strategic goods, which are regulated for national security reasons, were worth $4.5 billion in 2021, much higher than the $3.6 million registered a year earlier, with the US the leading destination, the Department of Trade and Industry (DTI) said.

In a statement on Monday, the DTI said the exports were tracked by Strategic Trade Management Office (STMO) from reports submitted by exporters.

The low 2020 total reflects the recent launch of the regulatory process, which started in October 2019 when the STMO started registering companies intending to export strategic goods. The STMO also started registering dual-use goods — unregulated exports whose alternative uses have national security implications — only in July 2020.

Information security systems, equipment, and components accounted for 98% of the total in 2021, while semiconductors and integrated circuits made up the remainder.

“The United States is the top country of destination in terms of strategic goods exports, accounting for 60% of the total value, followed by Japan (21%), Singapore (5%), South Korea (4%), and China (3%),” the DTI said.

The DTI defines strategic goods as products “that, for security reasons or due to international agreements, (are) considered to be of such military importance that their export is either prohibited altogether or subject to specific conditions.” Their export is governed by Republic Act No. 10697, or the Strategic Trade Management Act.

“Increased confidence in the Philippines as a safe and secure investment location for strategic goods manufacture and cross-border trade is reflected in the surge of strategic goods exports. This is excellent news, especially considering the economic downturn brought by the coronavirus disease 2019 (COVID-19) pandemic and the preventive measures implemented to contain it,” Trade Undersecretary Ceferino S. Rodolfo said.

Trade Secretary Ramon M. Lopez said the export of strategic goods, as regulated by the Strategic Trade Management Act, has the potential to stimulate economic growth.

“This is in line with the Strategic Trade Management Act’s mandate of promoting economic growth by facilitating trade and investment in strategic goods while also meeting the country’s international obligations to implement effective measures aimed at preventing the proliferation of weapons of mass destruction and their delivery systems,” Mr. Lopez said.

The DTI also disclosed that intangible transfers of technology — a subset of strategic goods — generated $650,000 worth of new investments in 2021.

“This includes nuclear energy contracts won by business process outsourcing companies which provide services to firms and corporations in other countries,” the DTI said.

The STMO has issued 13 export authorizations and registered 46 companies involved in the cross-border trade of strategic goods. — Revin Mikhael D. Ochave