Good business in 2013! (Part 2)

We continue our series on business assessments for 2012 as well as projections for 2013 from some of the country’s major industries and sectors which we started last week. We had the top officials of the Philippine Coffee Board, the PCCI (Philippine Chamber of Commerce & Industry), the Meat Importers & Traders Association and the Semiconductors & Electronics Industries of the Philippines, Inc. (SEIPI) with their valuable inputs.

The wood industry has never been so beleaguered. From the Philippine Wood Producers Association of the Philippines (PWPA), Mr. Tony Olizon (president) and Mr. Jun Keh (vice president) talked about the dismal year they had and the dim prospects for 2013 and beyond unless the current administration eases the current log ban imposed almost two years ago.

For lumber and plywood, business is down by 40 percent-50 percent, and they decry the unabated technical or outright smuggling of sub-standard but definitely much cheaper plywood from China. Considering the construction boom, there has been no increase in recorded wood importation, so how did they get in? They continue to maintain that Executive Order 23 is killing the legitimate wood producers in the country but has created a haven for illegal loggers and unscrupulous importers. The newspapers carry stories of apprehended logs, but has anyone been prosecuted or held accountable? That big “apprehension” in Subic recently turned out to be a fluke: the military admitted that the logs were not illegal after all—they were from planted species, with permits and legitimate, so the owner had the problem of transporting the logs from the port where they were unloaded to the final destination.

Plantation wood has severely limited the furniture makers, so our competitiveness in this sector has also been compromised in the last two years. They hope that by 2013, the wood industry will be rationalized and  they will finally be granted an audience with the President together with legitimate IFMA (Integrated Forestry Management Agreement) holders and that an evaluation of IFMA operations is finally made by the DENR.

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The automotive industry was hale and hearty for 2012.  Speaking for the Association of Vehicle Importers & Distributors, AVID president Ms. Fe Agudo (who is also president of HARI, distributors of Hyundai in the Philippines) hailed the sustained positive sales growth due mainly to our stable economy, the strong portfolio of products and services, infrastructure developments and the PPP projects, and ample government support for the industry.

AVID is looking at a growth of 5% in 2013, and is looking forward to the next AVID Thought Leadership Forum this year where they have zeroed in on the Innovation Policy.

From the government, they hope to see more liberalization reforms which, according to Ms. Agudo, will not be discriminatory. They are also hoping for the “removal of tariffs…in order to achieve the free flow of trade.” AVID looks forward to the development of the auto parts and components industry and will continue to promote healthy competitiveness in the industry.

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The real estate industry has a lot to crow about in 2012, and the jubilance is merited. Many of the CREBA members have ventured into socialized housing in response to the government’s call to private developers to address our serious housing backlog. To borrow CREBA president Mr. Charlie Gorayeb’s words, “it’s lively, it’s booming…it’s not a speculative market, it’s an end-user market.” The CREBA president also noted appreciatively the support of Vice President Jojo Binay, our housing czar, who has helped the industry tremendously.

On the negative side, Mr. Gorayeb decried the persistent problems they have with a government agency, the Bureau of Internal Revenue last year and even before that. He cited Republic Act 7279 which was embodied into law way back in 1993 where developers of socialized housing projects are exempted from some specific taxes. BIR’s insistence on the submission of the Certificate Authorizing Registration, he claims, and the run around that BIR agents are giving them, have contributed much to their woes for 2012. Projects have been delayed due to this, he says.  “BIR is the only problem, and it takes them years, years to issue that CAR.” Previously, the CAR was not a requirement, just the issuance of a certificate from HULRB giving clearance to specific developers.

Nevertheless, 2013 still looks bright for the country’s builders as the construction boom is seen to continue. They still hope to have the bill creating a Department of Housing passed in the Senate this year. It is now on its 3rd Reading, and while 16 Senators have signed it, Congress is sitting on it. Funny but for the last 19 years that it has been pending, Congress has always approved it, but it never got the nod of the Senate.  Now it is the other way around. Politics is reportedly behind this.

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From the Federation of Philippine Industries (FPI), our local industries fared better in 2012 than the previous year, this according to FPI long-time president Jesus Arranza, and this was due mainly to the heavy spending of the government, the continued remittances of our OFWs and the strengthened peso. The enhanced spending capability of our people has, of course, spelled the difference for the industry, further reinforcing the belief that the Philippine economy’s growth, at least for 2012, was consumer-fired.

The two sectors of this industry that suffered most in 2012 were the wood and the plastics industry, specifically the plastic bag and styropor sub-sectors due to the growing movement to ban them in key cities and municipalities. The FPI hopes that the government will see fit to adopt instead a selective ban policy for 2013 which will still provide for effective forest management.  For the plastic industry, he is calling for more efforts to educate our people on the real score on plastic use, proper disposal and recycling to stem the bleeding.

Mr. Arranza, the staunchest fighter against smuggling, noted that although there has been a slight decline under the leadership of Customs commissioner Ruffy Biazon, smuggling is still a lucrative business in our midst.

Mr. Arranza sees the construction industry to still lead the pack in 2013, and is confident that with higher government spending this year, the country will continue to see positive growth.

Mabuhay!!! Be proud to be a Filipino.

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