Smuggled, inferior products threaten local manufacturers

CEBU, Philippines - Local manufacturers are not troubled by the cheap imported products but are rather threatened by the smuggled and sub-standard ones in the local market, so said Bureau of Export Trade Promotion (BETP) Executive Director Ramon Kabigting.

“We asked them whether we should lower our tariff for the AFTA (Asian Free Trade Agreement). According to our consultations with big and small representatives of every industry, wala silang takot sa mga (legally) imported products (they are not scared of the legally imported products.) In fact, they are challenged by it,” he told The Freeman in an interview.

Cebu Business Club president Dondi Joseph, in a separate interview, confirmed Kabigting’s statement, saying competition is needed to encourage efficiency in productivity.

“This is something that Philippine industries need to be globally competitive. Free trade agreements work both ways: we now have a larger market we can export to. I prefer this business connectivity than more of the same protectionism we have suffered from for the last 40 years,” he said.

Kabigting said the Department of Trade and Industry (DTI) conducted a series of interviews with industry players all over the country for three weeks to get their sentiments on the Philippines’s signing AFTA.

He said the local businessmen however want a more efficient and user-friendly process in the Bureau of Customs and stricter monitoring of imports and their quality, among others.

“And we have started addressing these concerns. Customs now have a national single window, wherein important trade players like banks, warehouse, importers and exporters are informed of transactions simultaneously. Some transactions can also be done now through their mobile phones,” Kabigting said.

He also clarified that DTI is not totally against the approval of the Philippine Trade Representative Office (PTRO) bill, which creates the PTRO, an agency that will act as a watchdog on the country’s international trade transactions by leading negotiations in international trade agreements and ensuring transparency in the crafting of laws on these. The Office will be required to conduct consultations with the stakeholders on all aspects of trade policy formulation.

Lawyer Antonio Salvador, legal adviser of the Initiatives for Dialogue and Empowerment through Alternative Legal Service (Ideals), said during a seminar on Philippine Trade Policy for Media Practitioners that advocates of the PTRO bill believes that DTI is opposing the approval of the bill because it encroaches on some of the department’s functions.

“We (DTI) just feel that we should respect some traditional mandates and responsibilities of the DTI. But we are not totally against it. We have policy-makers, if they see that the office is needed, so be it” Kabigting said.

The PTRO bill was already approved by the House of Representatives on its third and final reading in July last year. It was not however scheduled yet for second reading in the Senate. After gaining approval from the lower house, bills are passed on to the upper house or the Senate for three more readings and approvals.

In a speech before Cebuano micro, small and medium entrepreneurs last month, newly appointed DTI Chief Jesli Lapus said the department, under his administration will strengthen its services to local industries by protecting them from the cheap imported products flooding the market

“(I believe that) we need to have domestic stability. We have to enhance the support we (the government) are giving to our local businessmen,” he said.

Lapus said that there must be safeguard measures put in place against the dumping of imported goods to the local market to protect our local industries, especially the MSMEs, from dying as well as protect the consumers from an inevitable increase in consumer goods.    

“These imported goods are cheap now. But once our local industries die and there are no local products to compete with them anymore, then (importers of these products) can now sell them at a higher price,” he said

The Philippines has entered into free trade agreements with the Asean (Association of Southeast Asian Nations), China, Korea and Japan, among others. The country is also a signatory of the agreement for “closer economic relations” within Asean-Australian-New Zealand and the Asean-India FTA.