Mandatory export rule scrapped

THE Export Development Council (EDC) will recommend the removal of the mandatory export requirement so that micro, small and medium enterprises (MSMEs) could also avail of perks granted to businesses that ship their products abroad.

“An exporter should get incentives regardless of how much it exports abroad,” Senen Perlada, EDC executive director, told The Manila Times on the sidelines of the National One Town, One Product (OTOP) Congress and Awards on Friday.

At present, exporters registered with the Department of Trade and Industry’s incentive-giving agencies are required to ship out at least 70 percent of production.

Perlada, who is also Bureau of Export Trade Promotion director, said MSMEs find it difficult to qualify for export incentives because of this requirement. “Because they are small, MSMEs begin with the domestic market. Without incentives, they could not pursue export activities.”

Perlada said other countries do not have a similar export requirement. “In some countries, as long as you export, you get incentives.”

He said EDC would harmonize and redefine what constitutes an “exporter,” in line with an ongoing review of the Export Development Act of 1994, as well as the drafting of the 2011 to 2013 Philippine Export Development Plan. “The more flexible we are, the better,” he said.

Perlada said they would pursue the amendment of the current export law “to keep up with the times,” especially amid a globalized economy.

He said the public-private sector body would seek greater support for export products that have higher local content.

EDC in February came up with a framework as starting point in formulating a new export development law and also the three-year rolling plan for the exports sector.

Besides the export plan, the Trade department has also drafted this year’s Investment Priorities Plan (IPP), which awaits President Gloria Arroyo’s signature, outgoing Trade Secretary Peter Favila said.

Favila told reporters on Friday night that he has endorsed the 2010 IPP to Malacañang before he resigned from the trade portfolio early this month.

Trade Undersecretary Elmer Hernandez confirmed that this year’s IPP retained the contingency list for troubled firms.

Hernandez said that the National Economic and Development Authority (NEDA) has recommended that the contingency list be reinstated in the 2010 IPP.

“NEDA said that the effects of the crisis can still be felt,” he told reporters.

Hernandez said the implementation of this contingency list would be lifted when NEDA declares that there is no more need for it. –BEN ARNOLD O. DE VERA Reporter, Manila Times