Request for level-playing field

The present administration’s thrust of seriously wooing direct foreign investments into the country has surely contributed to the booming national economy and our business leaders have collectively applauded the latest GDP figures, the recent reported growth rate making us Southeast Asia’s fastest growing economy. I join the many in Philippine business circles in recognizing the current administration’s serious efforts to drive the Philippine economy to new heights.

The Board of Investments (BOI) is also an agency I have the utmost respect for, remaining untainted by dirty politics and corruption.  The men and women who serve there, led by BOI head Cristino Panlilio, are career professionals who have made it their personal fight to bring as much foreign investments into the Philippines as they can make possible.

Having said that, I hope I do not rock BOI’s boat with my questions of concern. This involves the agri-business projects worth P23.2 billion of Charoean Pokphand or CP for short, involving broiler production (chicken). Under the Investment Priorities Plan (IPP) for 2012, agriculture and agribusiness have been prioritized, hence businesses under this, especially those under what they call as “Pioneering Status”, are entitled to special perks and tax holidays. Pioneering status is for those businesses located in under-developed regions in the country. It was with some degree of indignation that officials of UBRA (United Broilers & Raisers Association) led by its president Gregorio San Diego (GSD) protested the granting of such perks and tax holidays to the newest and biggest player in the poultry business, CP, saying their hatchery farms are located in Pampanga, Bulacan, Tarlac, Nueva Ecija and Pangasinan, which are in fact already overcrowded, hardly under-developed.

CP is undoubtedly the biggest, most advanced among our growers. According to Mr. San Diego, local growers employ one laborer for every 6,000 heads; CP employs one for every 60,000 heads.  That is how advanced their technology is, and CP has no local partner.  They simply do not need one, being perhaps the world’s biggest integrator. “Ito ay napakalaki to the point na even San Miguel ay medyo takot na din,” says the UBRA head.

Actually, having one of the world’s biggest poultry growers in the country poses a problem for one sector but a boon for another agency whose task is precisely to increase our FDI. The local poultry sector fears that they will be swallowed whole by the new giant in the years to come.  Facing up to the challenge posed by the national government two years ago to expand, they report that they have been steadily increasing production, albeit not dramatically, in order to stabilize supply and prices. With 21 million birds (broilers) as CP’s initial output, the local growers are far from collectively outweighed, so they’re not yet worried about the volume, for now. According to UBRA, this year’s production is at 700 million broilers. “Ok lang yan kung ang sinasabi nila they will produce about 21 million birds, bawasin yan sa mga ini-import natin…hindi naman masyadong malaki ang market,” says the UBRA president. 

Time and again, the local poultry growers have been protesting the heavy importation of chicken and chicken parts, saying there is no need since the country can definitely meet the local demand. Not to mention the heavy outright or technical smuggling which continue unabated. Even when a ban on all poultry products (including ducks, century eggs and salted eggs) coming from China because of the bird flu was enforced, documents from the United Nations Comtrade reports that in 2010, seven million kilos of poultry from China arrived in the country. This is not hard to believe—Chinese restaurants here openly sell Peking duck and century eggs. If a ban is still in force, these must be smuggled, so have you heard of anyone hauled off to court for buying obviously smuggled birds? I’m sure though that many Peking duck aficionados will not be too happy about enforcing this though.  By the way, I too love Peking duck.

UBRA says they were not consulted by the BOI on the matter involving Thai company CP, and in fairness to the Department of Agriculture (DA), they too were likewise not consulted. DA Sec. Proceso Alcala went on record to press this point, hoping for a dialogue between the DA, BOI and UBRA officials. A meeting has been set among the three groups, but I have not received any feedback yet.  The broilers and growers association is going to press for equal rights so that local businessmen will also be given the same perks as foreign companies in the same line of business. “Tayo ang mga Filipino entrepreneurs…they’re getting incentives already from their own countries, local producers ay wala,” says Mr. San Diego.

Operations of CP have reportedly already started, but it is not clear whether the perks and tax holidays have been effected, though they have been approved. Sec. Alcala and Sec. Domingo of DTI reportedly want these held pending the dialogue.

Going back to the importation of chicken and chicken parts, apparently it is difficult to know exactly how much reach our shores because not all cold storages are accredited with the government. Those in Subic and Clark for instance are not covered by PEZA. If I am not mistaken, duties for imported chicken is at 40%, but if the declared values are grossly understated or even misdeclared, the importers or technical smugglers continue to rake in the profits.

As to recent reports in some dailies naming South Korea as the newest big market for our local chicken, the UBRA official says that the Philippines is indeed eyeing South Korea, but at this point our dressing plants in the country have not been accredited yet, and our government still has to complete the documentation.  Not the time to rejoice yet.

Our chicken export volume is not that big yet.  Last year, we exported 10 million kilos, mostly to Japan.  Of this, more than 80 percent came from San Miguel Corporation and less than 20 percent from the smaller growers.

Feedback on consumer concern

The marketing executive of White Hat Frozen Yogurt, Mr. Eric Chao e-mailed a long one to react to one of my consumer issues last week.

In the name of fair journalism we shall quote some lines (due to space limitations) from his letter, “I would like to explain what happened to the reader who submitted his complaint to you. First I would like to reassure you that we are a reputable company and customer happiness is very much our concern and that is why from the very beginning we made it a point to serve only the best quality yogurt that’s made from real milk sourced from local farms with the addition of Italian ingredients.”

 Though Mr. Chao raised some valid issues in his letter, including his company’s concern about protecting themselves against some unscrupulous practices, my point is to likewise bring to our readers’ attention unpleasant experiences as consumers. Definitely, a bunch of discount cards should not be applied for one purchase, I agree, but did the customer really demand that they be used all at once? The store reportedly did not even want to honor a single discount card, how can they insist on using all? The company is a reliable one and the brand trustworthy, as Mr. Chao pointed out, and I agree, but the staff should be well-informed. It can indeed be irritating and embarrassing to request for a legitimate P20 discount and be turned down, or made to wait while calls fly back and forth to clarify the conditions, only to be disapproved again at the end of a long wait.

Mabuhay!!! Be proud to be a Filipino.

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