The Japan-Cambodia Association (JCA) is seeking additional investment in the agricultural sector of Banteay Meanchey province, where most Japanese investors act in the electronics manufacturing and auto assembly markets.

During a visit to the northwestern province on the Thai border, JCA director and Nippon Koei Co Ltd general manager Tsutomu Tamura on February 1 met with provincial governor Um Reatrey.

Tamura said he had gone on the trip to learn more about the potential of the province, observe the rewards and challenges associated with the operation of the Japanese factories based in Poipet town, and gain other important insights.

“The JCA plans to lead Japanese investors on a visit to Cambodia, especially to Banteay Meanchey, a province with potential in agriculture, paddy rice, cassava and tourism,” he said.

The governor said that the Banteay Meanchey Provincial Administration is “always ready” to support the JCA’s initiatives and collaborate on any activities that could potentially bring economic prosperity to the province.

Reatrey called on the JCA to promote tourism and investment to Banteay Meanchey, especially in agriculture, saying that 85 per cent of the province’s 790,000 population is engaged in farming – highlighting the sector’s untapped potential for investment.

Banteay Meanchey provincial Chamber of Commerce president Chhoeung ChhivIen told The Post on February 2 that most high-rolling Japanese businesspeople based in the province invest in electronics manufacturing and auto assembly in the Sanco Poipet Special Economic Zone.

He suggested Japanese and other foreign investors look into agricultural product processing in the province, saying that major investments could have a meaningful impact on farmers, significantly helping them overcome market challenges.

Reatrey noted that the province has three primary border gates with Thailand – Poipet, Boeung Trakuon and Malai.

He also listed five major industrial zones in the province – Poipet-O’Neang Special Economic Zone, Sanco Poipet Special Economic Zone, Poipet PP Special Economic Zone and Ly Utny Special Economic Zone in Poipet town; and Sisophon Industrial Park in the provincial capital of Sisophon.

For original article, please read here

Author: Hom Phanet 

Source: The Phnom Penh Post 

Cambodia’s Prakas 542 provides the rules for implementing a value-added tax on non-resident foreign e-commerce suppliers.

MANILA, Philippines — Riding on the tailcoats of economic reopening in November in domestic and global economies, foreign direct investments to the Philippines grew for the sixth straight month, the Bangko Sentral ng Pilipinas reported Thursday.

What’s new

Data from the BSP revealed FDI tallied a net inflow of $1.1 billion in November 2021, sustaining its feverish pace of growth at 96% year-on-year.

On a monthly basis, FDI jumped 28.07%.

In 11 months, FDI net inflows to $9.2 billion, markedly improving 52.5% compared with the same period in 2020 and exceeding BSP's target of $8 billion net inflow for last year.

Why this matters

FDIs are firmer commitments that provide jobs for Filipinos, so the government wants to attract more FDIs and not only keep existing ones, unlike the so-called “hot money” which enters and leaves markets with ease.

For this year, the central bank revised its full-year forecast to $8 billion, which was already exceeded back in October 2021.

Other figures

• Equity capital placements, a measure of new FDIs, sagged 1.4% on a yearly basis to $1.74 billion in the first 11 months of 2021. The majority of this fresh capital came from Singapore, Japan, and the United States. 
• Intercompany borrowings between multinational companies and their local offices soared 82.1% year-on-year to $6.8 billion in the January-November period.
• Reinvestment of earnings swelled 12.8% on-year to $1.02 billion in the first 11 months of 2021

MANILA, Philippines — Firms waiting for the ratification of the Regional Comprehensive Economic Partnership (RCEP) should not be discouraged despite the delay as the Philippines can still catch up, according to the Asian Development Bank (ADB).

Still, the ADB said the deferment of the ratification of RCEP, which is considered as the world’s largest free trade agreement, is unfortunate.

During the launch of the Asian Economic Integration Report (AEIR) yesterday, ADB chief economist Albert Park said RCEP presents an avenue for economies such as the Philippines to find new opportunities and global value chains that are going to be facilitated by the agreement.

“So it is unfortunate to delay the implementation of that agreement. But at the same time, the agreement just went into force in January and I think its impact is going to be quite gradual,” Park said.

The RCEP took effect on Jan. 1 as the required number of countries had deposited their instruments of ratification of the deal.

However, the Philippines failed to ratify the agreement. The Senate last week adjourned its session for the election break.

President Duterte ratified the RCEP last September. It has since awaited the concurrence of the Senate.

Amid the delay, Trade Secretary Ramon Lopez expressed hope that the Senate would give its concurrence once session resumes in May.

Park said the impact of RCEP would unfold over time as companies understand and then react to the changing opportunities brought about by the agreement.

“I don’t think companies in the Philippines or workers should feel discouraged as long as there’s an agreement to get there eventually. I’m sure as the years unfold, those opportunities will also be made available. And that’s true for any country, not just the Philippines,” Park said.

In particular, ADB economist Cyn-Young Park said the trade deal would significantly help the business process outsourcing (BPO) sector in creating jobs and income for many Filipinos.

“The Philippine government, I do believe, is taking measures to ratify. I share the optimistic sentiment that it will provide great potential for promoting more active employment generation in the BPO sector in the Philippines,” she said.

The Philippines is a major hub for services exports through BPOs such as call centers and high-end outsourcing or knowledge process outsourcing and business process management.

The Philippines accounts for over 12 percent of the global IT-BPO market and is expected to cover 15 percent of the global outsourcing market this year.

In an earlier report, ADB said the RCEP could provide the Philippines with an additional $7 billion in exports by 2030 even amid trade uncertainties, allowing total exports to hit $184 billion.

Meanwhile, the AEIR showed that trade among economies in Asia-Pacific jumped to its highest level in three decades amid recovery from the pandemic.

Trade in the region grew nearly 30 percent in the first three quarters of 2021 following a 3.1 percent contraction in 2020.

Intra-regional trade made up almost 60 percent of the region’s total trade last year, the highest share since 1990.

ADB said the strong intra-regional trade, along with the release of global pent-up demand and the early economic recovery in China, underpinned the region’s economic resilience.

Source: The Philippine Star

CONVERSATIONAL commerce is among the digital trends that are seen to continue growing this year, a Viber executive said.

In a statement on Wednesday, David Tse, Rakuten Viber senior director for Asia-Pacific, underscored four digital trends, which include the further rise of conversational commerce.

"As we've witnessed on Viber, independent online business owners managed to get back on track and then move forward with more steady steps as they learn more about their customers' online behavior and preferences," Tse highlighted.

He said conversational commerce gained traction to replicate personal service without physical interaction, which increased the demand for chatbots.

"Before the pandemic, customers were used to receiving personalized services in traditional stores and their preference for an individual service shifted to digital and mobile shopping," he added.

Tse noted that Viber's Communities feature has seen a 22-percent growth in the country last year, especially those in business-related Viber Communities.

The feature allows brands and businesses to connect with consumers and have one-on-one conversations with members.

Tse also sees the trend for a person-to-person experience to continue this year, which he said online businesses can do by maximizing private chats with their customers.

"By increasing engagement with customers beyond just customer service support or promotional driven information, Communities allow businesses to create regular content to amplify the interest from the customers on the product category and organically create an interest-focused conversation rather than transactional conversation," he explained.

The digital era, likewise, highlighted more locally made products, according to Tse.

"This pandemic habit is likely to be embedded, as we've realized that going local can be very much part of our day-to-day life," Tse said.

Citing data from the trade and industry department, Tse noted that micro, small and medium enterprises or MSMEs accounted for 99.5 percent of business establishments in the country in 2020.

The segment also contributed around 36 percent to the country's economy in the past years.

Tse said data privacy would also be a priority for the consumers this year.

"Online business owners can better adapt and future-proof themselves by switching to partners that do not collect customer data for profit or by collecting data directly from consumers through conversational commerce, for instance," he said.

Source: The Manila Times

Several members of the tourism industry have observed an increase in the number of bookings and inquiries they receive.

This follows the announcement of the government to reopen the sector for fully vaccinated foreigners from non-visa-required countries for tourism and business purposes starting Feb. 10. 

Cebu Pacific spokesperson Carmina Romero told CNN Philippines' The Exchange that they have seen higher bookings with the relaxation of restrictions. She said they are ready to support this through increases in flight frequencies in the coming months.

SM Hotels & Conventions Corp. SVP-Operations Walid Wafik said they have been also observing the same trend, especially from domestic travelers. 

In terms of events, Wafik said they are expecting these will come back this year as organizers confirm allocations and spaces for the resumption of their in-person activities.

Tourism Secretary Bernadette Romulo-Puyat said more tourists from the United States - especially balikbayans - are expected this year, as well as those from South Korea and Japan. Travelers are also inquiring in tourist spots like Cebu, Palawan, Bohol, and Boracay, she added.

However, she noted the reopening next week will be gradual and is more of a signal that the country is ready and health protocols are in place.

Romulo-Puyat also said they hope the US Centers for Disease Control and Prevention will reconsider its warning against traveling to the Philippines since this did not consider the current drop in local infections. 

Source: CNN Philippines

Philippine merchandise exports closed 2021 with a 14.5% growth with value reaching USD 74.6B, based on preliminary data from the Philippine Statistics Authority (PSA). Despite the emergence of a new COVID-19 variant that has impeded the full recovery of the global economy, Philippines exported goods increased in December which added USD 6.3B in the country’s export earnings, an increase of 7.1% from USD 5.9B in December 2020. Current exports also grew by 5.2% compared to USD 70.9B in the full year 2019 and 9.0% compared to USD 5.8B in December 2019.   

Department of Trade and Industry (DTI) Secretary Ramon M. Lopez reported, “December PSA data also showed that seven of the top 10 major commodity groups have recorded increases in annual export sales, in which five of these 7 gainers breached their pre-COVID export levels, led by coconut oil (135.2%). As sales of coconut oil continue to accelerate, other coconut products are also gaining traction in the global market.”  

According to Research and Markets, the demand for coconut products is expected to grow significantly in the future as the consumption of processed food products grows due to the rise in urban population.  

Other commodity groups that recorded large export growths include other manufactured goods (53.5%), chemicals (43.0%), machinery and transport equipment (19.2%), electronic equipment and parts (16.5%), other mineral products (4.9%), and electronic products (1.8%). 

Electronics exports amounted to USD 3.92B in December 2021 which brought the year-to-date (YTD) export figures to USD 45.92B 12.9% higher compared to January-December 2020.  Top Philippine electronics exports last month were components/devices (semiconductors), electronic data processing, other electronics, telecommunication, and consumer electronics.   

The World Semiconductor Trade Statistics (WSTS) expects the global semiconductor market to grow by 25.6% in 2021 with a market size reaching USD 553B. This will be the biggest jump in semiconductor sales since the 31.8% increase in 2010. Moreover, the robust global consumer demand pushed all major product categories to double-digit growth rates, except for optoelectronics. 

For December 2021, the US imported USD 1.0B worth of goods from the country while China imported USD 925.2 million. Philippine exports in the two markets accounted for 31.4% or USD 23.4B of the country’s total exports in 2021. 

Meanwhile, preliminary data for 2021 shows that Philippine exports grew in its top five markets: US (18.3%), China (17.5%), Japan (6.8%), Hong Kong (7.6%), and Singapore (11.2%). 

The Trade Secretary shared that more than half of Philippine commodity groups have recovered from the adverse economic impact of COVID-19 and have breached pre-pandemic export levels.  

He said, “Our focus for the first half of 2022 is to unlock the unrealized export potential of the country and empower our exporters in seizing opportunities in the recovery of global markets. Unlocking trade barriers or frictions alone could add another USD 20B to our export earnings.”  

Based on a recent study conducted by the International Trade Centre (ITC), the Philippines has an unrealized export potential of USD 49B, of which USD 20B is due to product-market-specific frictions and USD 29B is based on the projected growth of the Philippines and its export markets. According to the study, these trade frictions are often linked to lack of market knowledge, difficulties in complying with market requirements, and difficulties in matching buyers with the right suppliers, among others.  

Reinforcing the importance of the coconut industry in Philippine exports, ITC’s Export Potential Assessment has also identified coconut as one of the products with the highest export potential among the agricultural products with more complex value chains. The DTI will focus its efforts on promoting high-value coconuts, targeting the health and wellness market and other non-food uses for coconut, aside from the traditional food product segments.  

“As part of our initiatives to assist coconut exporters to unlock the unrealized export potential, we will be providing technical and marketing support to selected MSMEs through training and coaching on export management and marketing, including support to their participation in international trade fairs and business matching sessions,” said DTI Undersecretary for Trade Promotion Abdulgani Macatoman.  

He added, “First for this year will be the export promotion activities in the Middle East/North Africa (MENA) region, including in-store promotion of Philippine food products in leading supermarkets in the United Arab Emirates (UAE), participation in Gulfood, and a business matching session in Dubai.” 

Other products with high export potential include are bananas, pineapple, and tuna. The study estimates that Philippine agriculture, food, and beverage exports still have an unrealized export potential of USD 5.2B. 

For manufacturing, the sub-sectors that are technologically advanced and exhibit important export growth opportunities are motor vehicles and parts, plastics and rubber; optical products, watches, medical instruments, and machinery and electricity. 

The ITC study was conducted as part of the ARISE Plus Philippines Project supported by the European Union. The Project aims to foster inclusive economic growth in the Philippines through improved international trade performance and competitiveness as well as economic integration.  

Sec. Lopez added, “The ITC Export Potential Assessment validates and quantifies the potential of our export industry to grow by nearly twice its export levels in the next five years if we invest in increasing our production capacities and unlock or address these trade frictions.” 

Source: Department of Trade and Industry Philippines