Little is known about a landmark piece of legislation that could potentially unleash the tremendous potential of Philippine-made products and local industries.
Earlier this year, President Marcos signed into law the Tatak Pinoy (Proudly Filipino) Act, which aims to encourage, support and promote the production and offering of Philippine products and services of increasing diversity, sophistication and quality by domestic enterprises that are globally competitive.
The new law provides that the State has adopted a policy of not only promoting and safeguarding the quality of Philippine products and services in both the domestic and global markets as a means of encouraging economic growth and consumer and business confidence in Philippine industries, but also of giving preference and priority to the procurement of local products and services by government agencies and instrumentalities.
By “sophisticated products and services,” it refers to those that require a high level of technology, human capital, competencies or know-how, and infrastructure to be produced or offered.
Republic Act 11981 created the Tatak Pinoy Council, chaired by the Secretary of Trade and Industry, with the NEDA Director General and the heads of the Departments of Finance, Agriculture, Budget and Management, Information and Communications Technology, the Interior and Local Government, Labor and Employment, Science and Technology, and four private sector representatives as members. The Council will serve as the policy and advisory body of the President and will be tasked with formulating policies and programs to diversify the productive capacities of domestic enterprises and increase the country’s economic complexity.
A Tatak Pinoy Strategy (TPS) will be formulated and implemented once approved by the President. It will outline the plan and action components for the country, as well as for its regions, provinces, cities, and municipalities, to incrementally and systematically expand and diversify the productive capabilities of domestic enterprises and empower them to produce and offer increasingly sophisticated products and services to compete in the global market.
The TPS will include plans and programs, comparable with international best practices, organized according to four pillars: human resources, infrastructure, technology and innovation, investments and sound financial management. Under each pillar, the TP Council will identify relevant public-private initiatives and government support or assistance to be provided per targeted sector or economic activity.
Meanwhile, for 10 years, preference and priority will be given to Philippine products and services in sectors and economic activities covered by the TPS, applying to all levels of the procurement process, including raw materials, ingredients, supplies and fixtures.
Government financial institutions are also required to ensure the availability of credit to domestic enterprises, including the provision of low-interest or flexible-term loan programs, credit guarantee programs, and other modes of financing, such as leasing and venture capital activities, to enable these enterprises – especially micro, small, and medium enterprises (MSMEs) – to expand their businesses and perform necessary technology upgrades, leading to more sophisticated products and services.
Earlier, the DTI emphasized that the main objective of the law is to create products that improve the country’s export performance because the Philippines has lagged compared to its neighbors. The DTI added that products of higher complexity tend to raise a country’s export earnings.
It said that between 2006 and 2021, the Philippines only managed to venture into 30 new export products, contributing $41 to the gross domestic product (GDP) per capita. In contrast, Vietnam ventured into 41 new products, boosting its GDP per capita by almost $1,500.
The Philippines’ export volume of $74 billion likewise pales in comparison with Indonesia’s $231 billion, Thailand’s $266 billion and Vietnam’s $355 billion, the DTI noted.
I was just in Vietnam recently, and I marveled at Vietnam’s coffee culture and how the country managed to grow its coffee industry into a global phenomenon.
Coffee was said to have been introduced to Vietnam in 1857 by a French Catholic priest who brought an Arabica tree to the northern region. With a tropical climate ideal for cultivating coffee, the industry started to boom in the Annam region in the 1890s. Over the next decades, coffee plantations began to grow in the highland region, and by 1950, Vietnam’s first commercial coffee processing plant was built, propelling hopes for a new industry that would put Vietnam on the map. By the 1990s, Vietnam rose to become the world’s second-largest exporter of coffee, outpacing Colombia. In 2020, Brazil was the top exporter and producer, followed by Vietnam.
Vietnam is home to 710,000 hectares of coffee in 20 provinces, mainly in the Central Highland region. Robusta accounts for 95 percent of its coffee production, while Arabica makes up the remaining five percent. Vietnamese coffee is now present in more than 80 countries and territories worldwide. Vietnam contributes more than half of the global Robusta supply.
What about our coffee industry?
With a tropical climate and soil conditions suited for coffee production, the Philippines is one of the few countries that produces the four varieties of commercially viable coffee: Arabica, Robusta, Liberica (Barako) and Excelsa.
In 1886, the country was reputed to be the fourth-largest exporter of coffee beans, according to the Philippine Coffee Board.
Unfortunately, only 111,000 hectares (compared with Vietnam’s 715,000 hectares) were planted to all types of coffee as of last year, and this area has been continuously declining.
Despite our high consumption of coffee, our self-sufficiency rate is about 15 to 20 percent at most, which means that we import 80 percent of our requirements. Our production is a dismal 30,000 metric tons (compared with Vietnam’s 1.65 million MT), while we consume 200,000 MT. Our coffee industry is virtually non-existent.
If we could only supply our own coffee demand, imagine how much foreign exchange savings this would translate to, not to mention the jobs that would be generated and the multiplier effect on the economy. The world loves coffee, and this is surely one export product with huge global potential.
This is one industry that the TP Council should definitely support.
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