Exporters, DTI Want ₱10-B Trade Budget

Exporters are strongly urging the government to double the budget of the Department of Trade and Industry (DTI) to P10 billion to boost support and development of the country’s exports sector as they grumbled about the “tokens” and “lip service” given to the sector, which targets to achieve $240 billion in exports by 2028.

Photo Insert: The PEDP enables the shift in the government's approach in terms of export development.

Sergio Ortiz Luis Jr., president of the Philippine Exporters Confederation Inc. (PhilExport), strongly emphasized the need for more concrete funding for the export sector at the launch of the Philippine Export Development Plan (PEDP) 2023-2028 at the International Trade Forum (ITF) at the Shangri-la Fort.

For his part, Trade and Industry (DTI) Secretary Alfredo E. Pascual concurred with Ortiz-Luis in seeking a higher budget to give it more room to promote exports and help micro, small and medium enterprises (MSMEs).

According to Pascual, the DTI’s budget for 2023 has been significantly lower than in 2022. “For next year, we are asking for a higher budget… (to) what it should be if we want to promote export and help MSMEs develop. This is an expenditure of government that will have a return to the economy.”

The six-year PEDP targets to achieve $240 billion in exports by 2028, but Ortiz-Luis said that to achieve this target, the government must give its trade department an additional P5-billion budget from its current budgetary allocation of P6.3 billion.

“We should double the DTI budget to support export development,” he said. The additional P5 billion budget should be used to beef up foreign commercial postings of the agency for trade promotion, he stressed. He noted that even CITEM, the country’s trade promotion arm of the DTI, has no budget for international promotion like trade fairs.

“Why are we not investing in export development when we could do it in all other departments? DTI has lots of responsibilities, but it has a very small budget,” he grumbled as he compared the budget for the conditional cash transfer, which he said at one time reached P87 billion.

Ortiz-Luis also expressed dismay at the penchant of the government to mouth digitalization and the crafting of laws, including the Magna Carta for MSMEs, that do not work and which he likened to mere “tokens”.

“If you really want to develop exports, particularly the micro small and medium enterprises (MSMEs), it should not just be tokens or digitalization talks, which do not really solve problems,” he said. He, however, qualified that while these “tokens” help, these are just some sort of lip service just to say that they are doing something for the export sector.

Ortiz-Luis also noted that the combined budget of government agencies involved in export development such as DTI, the Department of Science and Technology ad the Department of Information, Communication and Technology does not even come close to the P15 billion once disbursed for CCT.

“Give enough funds for DTI for projects that are worthwhile,” he said, noting that the last time the export sector was allocated export support was during the time of then-President Benigno Aquino III. The export sector was granted a P120 million support fund, but the fund was not fully utilized because of bureaucratic red tape.

He also lamented that the Magna Carta for MSMEs failed to benefit the MSMEs for the past 20 years as its purpose has been diluted by several exemptions for banks' compliance with the law’s requirement to allot 10 percent of its funds for MSME financing. Ortiz-Luis blamed the central bank for easily allowing banks’ substitution compliance to the 10% rule on fund allocation to MSMEs.

In fact, he added, the BSP is the “worst central bank in Asia for MSMEs” where its loan allocation to MSMEs is not even one-tenth of Thailand’s. The Small and Medium Enterprises Development Council, which is tasked to promote the productivity and viability of MSMEs, has not also been convened for a long while now. Nonetheless, Ortiz-Luis cited the new PEDP for being focused on industries, unlike the past plans which are always macro-based.

“This time, we are targeting the small, which needs to be developed because these are resource-based like agriculture,” he also said, citing the OTOP Program. Fortunately, he cited some good news about fund support for the salt industry.

During his opening message at the ITF, DTI Secretary Alfredo E. Pascual said the launch of the PEDP and the Philippines for the Regional Comprehensive Economic Partnership Agreement are two strategic pillars that will be instrumental in bringing the theme of “Empowering Philippine Export Industries”.

The ITF is a crucial part of the Department's efforts to heighten awareness of stakeholders on trade policies and their impacts on their businesses and encourage more micro, small, and medium enterprises (MSMEs) to participate in trade policy formulation.

The event brought together more than 200 representatives from the government, the Philippine business sector, Foreign Trade Agreement (FTA) partners, business chambers, and the media.

With the aim of tapping the vast potential of Philippine exports, the PEDP enables the shift in the government's approach in terms of export development.

It puts export development on a national agenda and focuses on addressing binding constraints to export competitiveness, expanding the country's export capacities, and seizing growth opportunities in the international market. It likewise seeks to undertake an industry development-centric approach that will make the Philippines a competitive global player.

"We need to chart a course that includes cultivating an environment that fosters business growth, empowering our industries not just to survive but flourish in a dynamic global landscape, leveraging the full spectrum of our preferential trade arrangements like the RCEP, projecting the visibility of our products on the international stage, and perhaps most critically, attracting investments to enhance, expand, and diversify our production capabilities," Pascual emphasized in his message.

Further, President Ferdinand R. Marcos Jr. also witnessed the signing of the Statement of Commitment to Implement the Philippine Export Development Plan, which was signed by Pascual together with other public and private sector representatives in export development.

The Statement commits the signatories in fulfilling the following: (1) Ensuring the implementation of the PEDP; (2) Identifying, implementing, and supporting policies, programs, and projects in line with the PEDP; (3) Addressing binding constraints to export competitiveness, particularly burdensome and unnecessary regulations; (4) Complying with the monitoring, evaluation, communication and reporting of the PEDP outcomes; and (5) Reaffirming the importance of the Export Development Council (EDC) as a public-private partnership through diligent participation in council meetings.

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