NEARLY three-fourths of exporters and importers in the Philippines are burdened by bureaucratic measures and regulations—the so-called non-tariff measures (NTMs)—that serve as barriers to trade, according to a survey conducted by the International Trade Center (ITC) in partnership with the Department of Trade and Industry (DTI).
The survey found that about 70 percent of the 1,150 local exporters and importers surveyed suffer from burdensome regulations or NTMs in the Philippines—one of the highest rates in Asia compared to other ITC surveys conducted in the region.
The export clearance process in the Philippines is one of the most burdensome in Asia, requiring approval from some 50 public and private institutions and high fees, which together serve as barriers to trade.
Mathieu Loridan, market analyst at ITC’s Market Analysis and Research division, told The Manila Times that traders’ concerns about NTMs should be addressed through improved transparency, facilities, and procedures from trade facilitators.
“The perception of NTMs of Filipino exporters and importers shows that NTMs are an important issue for the private sector and must be addressed such,” Loridan said in an email interview.
The 2015-2016 business survey showed that Filipino exporters and importers find it hard to comply with foreign technical requirements and conformity assessment procedures — like fumigation, labeling and packaging regulations, or product certification and testing — which are often stricter in developed countries.
The foreign standard of “rules of origin,” which indicates where the goods came from, also often generates unnecessary costs and delays from Philippine institutions, the survey showed.
Filipino exporters interviewed also decried the high fees and administrative burdens of the national export-clearance processes which occur in local administrations.
The exporters said about 50 public and private institutions are involved in NTM-related procedures, indicating the heavy administrative cost of compliance.
The findings and recommendations from the survey — which was completed in April — were presented to over 60 representatives from the Philippine public and private sectors through a roundtable consultation session on Wednesday, June 29, to discuss ways on how to address the NTMs that affect exporters and importers in the country.
“One important lesson of the survey is that many NTM challenges can be addressed domestically through improved transparency, facilities, and procedures. Yesterday’s roundtable allowed participants to debate openly about the key obstacles to trade and policy options to overcome them,” Loridan said.
“DTI and other authorities seemed very committed to work further in this area starting with the Export Development Plan (EDP) that will be based on the survey findings and recommendations,” Loridan added.
During the meeting, Trade Undersecretary Nora K. Terrado said the survey and recommendations from the ITC would prompt the public and private sector to work on addressing these challenges to trade.
“It is through [working together]that we can identify concrete projects, remedies and solutions that will enable the formulation of better policies as well as national and sectoral action plans,” Terrado said during the roundtable consultations.
A dozen proposals were generated during the meeting, mainly highlighting the need to speed up compliance of local products to foreign regulations, streamline export and import clearance, and simplify customs procedures.
New report due end-2016
The conclusions of the survey findings and the public-private sector consultations will be put together in a separate report entitled “Philippines: Company perspectives – An ITC series on non-tariff measures” which is expected to be published by the end of 2016.
The upcoming report will help formulate trade policies and trade-related technical assistance projects at the national and regional levels, as well as give recommendations for the country’s EDP, which aims at rebalancing the economy from being consumption-driven to being led by investment and exports.
The 1,150 interviewed participants in the ITC business survey were considered a representative sample of the 9,000 exporters and 20,000 importers in the Philippines as of end-2015, according to the DTI’s Export Marketing Bureau.
The 1,150-respondent sample contains representatives from various sectors to permit the researchers to draw specific conclusions for each sector.
ITC is the joint agency of the World Trade Organization and the United Nations, assisting small and medium-sized enterprises (SMEs) in developing and transition economies to become more competitive in global markets.