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Policies
• DENR
AO No. 58 series of 1987
• DENR AO No. 31 series of 1991
• DENR AO No. 42 series of 1991
• Macroeconomic Policies
• Ministry AO No. 37 series of 1986
• Omnibus Investment Code of 1989
• Sectoral Policies and Regulations
Macroeconomic
Policies Affecting the Bamboo Industry
1.
Trade Liberalization.
Trade
liberalization is complemented by policy initiatives to:
• Liberalize the foreign exchange market
• Provide fiscal and nonfiscal incentives and create an export market
orientation
• Institute tax measures
• Introduce financial packages.
These initiatives are intended to boost export promotion and industrial
growth. Trade liberalization is consistent with the government's
commitment to the General Agreement on Tariffs and Trade/World Trade
Organization (GATT-WTO), ASEAN Free Trade Area (AFTA), Asia Pacific
Economic Cooperation (APEC), and other international agreements.
Such commitment will allow the country to benefit from the tariff
concessions and liberalization measures made by member-countries.
The country hopes to gain greater access to markets and investments
opportunities.
2. Foreign Exchange. When the peso depreciates, exporters benefit
through higher peso returns per dollar worth of exports in the international
market. Policy initiatives involve:
o Liberalization of foreign exchange rate. This involves lifting
of requirements for exporters to surrender export receipts and
dismantling of controls on capital repatriation, dividend and
interest remittance; and
o Bangko Sentral ng Pilipinas (BSP) intervention on the exchange
rate for greater stability. For the bamboo manufacturing industry,
some imported inputs (varnish, leather) may become expensive with
greater peso devaluation but such potential negative effect appears
to be less relative to greater gain achieved through enhanced
exports and reduced imports of substitute products.
3.
Minimum Wage. For large export-oriented manufacturing firms, which
are largely dependent on hired labor, rising wages increase production
cost without corresponding productivity growth. This reduces their
degree of price competitiveness. This eventually can lead to lower
profitability, lower rate of employment and lower exports. Thus,
recent proposals for increasing minimum wage have been largely opposed
by the industrial sector.
4. Interest Rate and Financing Policy. Studies show that interest
rates in the Philippines are higher than other Asian countries.
High interest rates dampen demand for credit for investment in productivity-increasing
facilities and technologies. Policy initiatives also include deregulation
of market for loanable funds, and liberalized bank branching and
entry of new domestic and foreign banks. This results to a greater
number of financing institutions in both urban and rural areas and
availability of credit to industries and enterprises. Of the various
credit programs intended for small and medium scale enterprises,
the bamboo industry may avail of the following:
o Guarantee Fund for Small and Medium Scale Enterprises (GFSME),
which provides loans on fixed asset acquisition (with maximum
of 25% of loan for land), plant construction, and temporary and
permanent working capital with loan size of P50,000 to P8 M.
o Industrial Guarantee and Loan Fund (IGLF) for manufacturing,
cottage and small and medium enterprises and agri-based projects
in regions other than National Capital Region (NCR), Regions III,
IV, and VII.
o Funds under the Small Business Guarantee and Financing Corporation
(SBGFC) as provided for in the Magna Carta for Small Enterprises,
which is for manufacturing, processing, and agribusiness (except
for farm level production) and services (except pure trading).
o Financing program of the Urban Livelihood Financing Program
(ULFP) of the Technology and Livelihood Research Center (TLRC)
for manufacturing firms.
5.
Money Supply Management. The inflation rate in the Philippines,
which is influenced by money supply, is higher and more variable
than in the neighbor countries. High inflation rate increases production
cost, puts strong pressure on wages, and discourages savings and
investments in the long term.
6. Trade Agreements. The basic provisions of trade agreements entered
into by the Philippines relate to liberalization of imports. The
GATT/WTO, which was ratified in 1994 provides for tariff concessions
and liberalization measures to enhance trade flow among 120 member
countries.
7. Fiscal and Non-fiscal Incentives. Fiscal incentives are policy
measures aimed at reducing the tax burden either by outright, total
or partial exemption from a particular tax, or by preferential tax
treatment. In any case, the rate of return on the firm's investment
is increased. The incentives can include income tax holidays, tax
deductions and credits, exemptions from indirect taxes including
tariff duties, and grants and subsidies. Non-fiscal incentives are
other measures providing indirect benefits to investors. These include
basic investment rights and guarantees, foreign equity participation,
employment of foreign nationals, repatriation of profits, intellectual
property protection, and other services to investors. Both are intended
to make investment attractive, promote partnerships or joint ventures,
and dampen adverse impact of trade liberalization on domestic industries.
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Sectoral
Policies and Regulations Affecting Bamboo Sector
1.
Bamboo Harvesting and Transport. The collection and harvesting of
bamboo in forest lands is governed by existing DENR policies and
regulations which requires the gatherer to secure a cutting permit
as specified in the Revised Forestry Administrative Order No. 11
dated September 14, 1970. Bamboo is lumped with other non-wood (minor)
forest products. Pursuant to DENR Administrative Order (DAO) 38,
Series of 1990 and in line with the DENR policy on decentralization,
the issuance of permit has been delegated to the DENR Regional Offices.
Applications for cutting permit may be filed through the CENRO concerned.
Exempted from the payment of forest charges for planted bamboos
are industrial tree plantations and private lands that are covered
by existing titles or tax declarations.
Aside from the cutting permit that must be obtained and forest charges
that must be paid for harvesting bamboo in public lands, DENR monitors
movement of bamboo by requiring a Certificate of Non-Timber Forest
Products Origin (CNFPO). This is specified in DENR AO 59 issued
on September 30, 1993. Again, exempted are those planted inside
titled and tax declared alienable and disposable (A and D) lands,
provided that they are certified by the Community Environment and
Natural Resources Office (CENRO) as such.
2. Bamboo Planting/Plantation Development. Bamboo is included as
one of the species that can be used in the reforestation and watershed
rehabilitation program of DENR. The DENR in its Integrated Social
Forestry (ISF) projects and the Community-Based Forest Management
Program (CBFM) have introduced it.
3. Bamboo Imports and Exports. Based on the amended rules and regulations
implementing PD 930, bamboo poles are prohibited from exportation
except for scientific or testing purposed for which an export clearance
from the government is required. Exporters of manufactured bamboo
products follow the general procedures required for exportation.
Importation of bamboo poles for commercial purposes is also not
allowed by the government, except for noncommercial purposes (e.g.
for pearl farm fencing). These policies should be reviewed to encourage
bamboo plantation development and sourcing of raw materials elsewhere
as necessary to support development of bamboo-based industries.
4. Cooperative Development. Under RA 6938, the Cooperative Code
of the Philippines, it is a declared policy of the State to foster
the creation and growth of cooperatives as vehicle for promoting
self-reliance and harnessing people power for attaining economic
development and social justice. RA 6939 created the Cooperative
Development Authority (CDA) to promote the viability and growth
of cooperatives as instruments of equity, social justice and economic
development, defining its powers, functions and responsibilities.
In the bamboo industry, cooperatives have the potential to support
business undertakings of farmers and small traders and manufacturers
particularly in the procurement of raw materials and inputs, marketing
of products, and facilitating access to other productive factors
and services on technology adoption, skills training, information
on markets and prices and financing.
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MAO
No. 37 series of 1986
• Bans the cutting of bamboo in Laguna and Rizal
DENR
AO No. 58 series of 1987
• Lifts restriction of cutting, transporting, utilization, and disposition
of bamboo and anahaw poles in Regions 3, 4, and 5
DENR
AO No. 31 series of 1991
• Bamboo is included in the list of reforestation species.
DENR
AO No. 42 series of 1991
• Revised regulation and guidelines governing the establishment
and development of industrial forest plantations.
Omnibus
Investment Code of 1989
• Income Tax Holiday
• Tax and Duty Exemption
• Tax Credit on Domestic Capital Equipment
• Tax and Duty-Free Importation of Genetic Material
• Tax Credit on Domestic Genetic Material
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