Auto, sugar sectors called to seriously brace for integration

CEBU, Philippines - While the food manufacturing industry has generally adjusted to upcoming Asean integration, other industries such as the automotive and sugar sectors have to seriously prepare for the free trade market by 2015.

Philippine Institute for Development Studies (PIDS) senior researcher Dr. Erlinda Medalla cited that the automotive sector is challenged to move up in the value chain and acquire a bigger share of the market.

She also noted that the sugar industry is considered to be a vulnerable sector in the future with the remaining substantial tariff reduction from 18 percent this year down to five percent in 2015.

"Modernization and rehabilitation programs should be in place by then," she said during the Asean Integration Forum conducted by the Central Visayas Regional Development Council and the Cebu Chamber of Commerce and Industry.

Medalla said that the integration's single, integrated production base's impact on the Philippines is equally important as Asean now serves as a base for globally-integrated production chains. 

Evident to such are the top products Philippines imports and exports to Asean which represent inputs to and outputs from a set of industries with global chains such as electronics and semi-conductors, automobiles and automotive parts, and electrical machinery or consumer electronics.

While the Asean supplies the Philippines with critical raw materials and food items particularly rice, cereals, fuel and oil, the latter has intensified exports to Asean such as copper, ships, and tobacco. 

Meanwhile, the Asean aims to create a national single window (NSW) that could speed up data processing and cargo clearance procedures with a turnaround time of 30 minutes.

Medalla cited that this would create a positive impact on the cost of doing business for both large industries and micro, small and medium enterprises (MSMEs).

The upcoming Asean Economic Community (AEC) promotes equitable development, especially among SMEs to narrow the development gap in the ASEAN region.

She also pointed out the areas that still have large gaps. These include linkages between NSW and the Bureau of Customs (BOC), export declaration, support documentations, and inspection and release of goods.

In a study conducted by PIDS to assess the trade facilitation and custom modernization of the government, the Philippines has implemented electronic transactions in most key customs processes, except in  electronic export declarations and electronic certificate of origin.

BOC said that the NSW is now implemented in the major seaports and airports with its nationwide coverage targeted by 2015.

While there are 38 other government agencies currently linked to the NSW, a total of 50 government agencies are envisioned by BOC to be linked to the same portal two years from now.

Around 25 percent out of the 10,000 registered agencies use the NSW portal.

Findings of the said study showed improvements in trade facilitation arising from customs modernization and reforms to implement the NSW and in the degree of automation of procedures, especially in import declaration and for payments of taxes and duties. — (FREEMAN)