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HIDDEN AGENDA - Mary Ann LL. Reyes (The Philippine Star) - October 24, 2020 - 12:00am

Last August, the Department of Trade and Industry (DTI) launched a national campaign called “Buy Local, Go Lokal,” which is aimed not only at helping micro, small and medium enterprises or MSMEs that make up the biggest part of the Philippine economy, but also at encouraging Filipino consumers to shift their buying patterns towards consuming and purchasing local produce and goods.

According to the DTI, the campaign will help stimulate the economy, ravaged by the pandemic, from the bottom up by keeping money circulating in the local economy. It is also DTI’s answer to the difficult problem of boosting economic activity while still encouraging people to limit activities outside their homes to  just buying important necessities.

More recently, the DTI, together with select retail partners, introduced Go Lokal! which is a market access platform provided to MSMEs for market incubation and brand testing.

As pointed out by former Bangko Sentral ng Pilipinas deputy governor Diwa Guinigundo in a paper prepared a few years’ back, in the past half century, the world economy has become much more integrated, interdependent and intertwined as globalization, which is defined as the mobility across borders of goods and services among others, and liberalization appear to have become an inevitable and irreversible trend. He said that regional trading arrangements, the removal of restrictions on the flow of trade and investment, and rapid technological changes have led to the deepening of economic integration and the heightening of globalization.

Guinigundo noted that the Philippine economy has become increasingly integrated with the global economy as shown by the general increase in trade in goods and labor migration. From the 1990s to the 2000s, he said that trade openness in the Philippines improved from 88.1 percent to 101.1 percent of the country’s gross domestic product.

I remember back in high school when I would beg my mom to buy me the latest Ace brand of imported leather bags because it was sort of a status symbol if you were using one. We had to go all the way to Zurbaran Market in Manila where you could then buy items that were made abroad. At that time, huge shopping malls were non-existent and the few that we had at that time like Shoemart, COD, Ali Mall or maybe Farmers Plaza sold mostly locally made goods. Then, of course, I had all sorts of Sanrio products on my hair, on my school uniform tie, from a small store near my school because it was uso those days.

Who can forget PX and stateside goods which became a status symbol and which you could buy in abundance from outside the Clark Air Base in Pampanga. Or the times when balikbayan boxes from the US would be stuffed with corned beef, shampoo, soap, towels, chocolates, and  bedsheets since these were either not available here or were very expensive. Or when every time I would go to Hong Kong, I would stuff my luggage with items bought from Watsons.

After the Philippines joined the World Trade Organization in 1995, imported goods became a lot cheaper. Also, in 2000, retail trade was liberalized, paving the way for the entry of foreign retailers like Watsons, Forever 21, H&M, among others. Imported clothing became cheaper and more accessible to the masa crowd and local clothing brands had to use foreign endorsers just to boost sales.

Why buy locally made products when you can buy imported ones here at comparable prices, but with better quality?

From time to time though, you would hear of local products that made it big in the international arena, like Cebu-made furnitures or in particular those designed by Kenneth Cobonpue. Or Filipino fashion designers like Monique Lhuillier. Or products like San Miguel Beer, which are being flown to the remotest places like Mt. Everest. Unfortunately, these are few and far in between.

One local industry, however, which has successfully differentiated itself from its foreign counterparts and has had a very loyal following here is the cement industry. Filipinos buy cement from the hardware stores and prefer the locally produced ones, whether they carry Filipino or foreign brands. Filipinos generally do not trust imported cement because of many reports of smuggled cement whose quality is suspect.

Recently, the Cement Manufacturer’s Association of the Philippines (CeMAP) has brought to the attention of the DTI reports that imported cement is being mislabelled as locally produced.

There is actually a local company that used to be one of the country’s largest manufacturers of cement, but exited the business due to the Asian financial crisis and decided to focus on other ventures. Recently, it made a comeback by establishing a small cement facility, but decided to just sell mostly imported cement from Vietnam.

CeMAP, in its report to the DTI, said that the packaging of this company’s cement product bears the label “Product of the Philippines,” but CeMap said there was no way of knowing whether the product is actually made here when the company is a heavy cement importer.

CeMAP pointed out that there is no PS (Philippine Standard) printed on its cement bag, while the batch identification number and manufacturing date are not clear -- which could constitute non-compliance with DTI’s DAO 17-06 series of 2017.

But the DTI claims that this company’s bagging facility in Central Luzon has secured a PS license consistent with the provisions of the said administrative order. A DTI official explained that based on the guidelines, when the manufacturer is accredited by the Bureau of Product Standards,  they can then label their product as made in the Philippines. This means that even if the product is imported, so long as a company has the PS license, then the imported product may be labeled as locally made.

This is not only fooling the Filipino consumer. This also constitutes unfair competition, which “includes indications or allegations the use of which in the course of trade is liable to mislead the public as to the nature, the manufacturing process, the characteristics, the suitability for their purpose, or the quantity, of the goods.” This is a form of “free riding,” when someone takes advantage of another’s achievements, in this case, the reputation which the local cement industry enjoys in the minds of local buyers.

The local cement manufacturing industry in 2016 alone contributed about P155 billion or close to one percent of the country’s total GDP. Allowing imported cement products to benefit from a loophole in DTI’s policy could seriously erode the local industry’s economic contributions.

DTI’s “buy local” campaign should not be an empty slogan.

For comments, email at mareyes@philstarmedia.com

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