Gov't agencies reject proposed 'Competitiveness Enhancement Fund' for PH footwear industry | ABS-CBN
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Gov't agencies reject proposed 'Competitiveness Enhancement Fund' for PH footwear industry
Gov't agencies reject proposed 'Competitiveness Enhancement Fund' for PH footwear industry
Vivienne Gulla,
ABS-CBN News
Published Oct 19, 2022 12:06 AM PHT

MANILA—The Department of Finance (DOF) and the Bureau of Treasury (BTr) disagreed with the proposal to create a Competitiveness Enhancement Fund for the Philippine footwear, leather, and tannery industries.
MANILA—The Department of Finance (DOF) and the Bureau of Treasury (BTr) disagreed with the proposal to create a Competitiveness Enhancement Fund for the Philippine footwear, leather, and tannery industries.
Under House Bill 491, the Fund—consisting of 20% duties and value-added tax collected from the importations of footwear, leather goods and tannery—shall be allocated and disbursed for developmental and competitiveness enhancement activities, as well as the support of local counterpart industries. These include access to preferential credit for the modernization of plant machinery and technologies, subsidy for marketing and participation to fairs, subsidy for distribution, and assistance in accessing quality raw materials.
Under House Bill 491, the Fund—consisting of 20% duties and value-added tax collected from the importations of footwear, leather goods and tannery—shall be allocated and disbursed for developmental and competitiveness enhancement activities, as well as the support of local counterpart industries. These include access to preferential credit for the modernization of plant machinery and technologies, subsidy for marketing and participation to fairs, subsidy for distribution, and assistance in accessing quality raw materials.
The BTr instead recommended course funding for the said initiatives through the budget of the implementing agency, “subject to the fiscal space and availability of funds”.
The BTr instead recommended course funding for the said initiatives through the budget of the implementing agency, “subject to the fiscal space and availability of funds”.
“Regarding the creation of the Covered Industries Development and Competitiveness Enhancement Fund, we do not support the creation of this fund, as there is no new source of funding, which is being introduced and this will just be earmarking a portion of current collections,” BTr director Dominick Mariano said during the House Committee on Creative Industry and Performing Arts hearing of the proposed measure on Tuesday.
“Regarding the creation of the Covered Industries Development and Competitiveness Enhancement Fund, we do not support the creation of this fund, as there is no new source of funding, which is being introduced and this will just be earmarking a portion of current collections,” BTr director Dominick Mariano said during the House Committee on Creative Industry and Performing Arts hearing of the proposed measure on Tuesday.
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“While we defer to the DBM on the earmarking provisions, we are constrained to support the provision as we still adhere to the One-Fund Policy concept of the government, wherein all revenues must accrue to the general fund, to be managed by the national treasury, as the utilization and disbursement are subject to budgetary process… Collections from VAT are already funding vital government programs as part of the general fund, which the government cannot afford to lose,” DOF’s legislative liaison specialist Jeanne Guinto added.
“While we defer to the DBM on the earmarking provisions, we are constrained to support the provision as we still adhere to the One-Fund Policy concept of the government, wherein all revenues must accrue to the general fund, to be managed by the national treasury, as the utilization and disbursement are subject to budgetary process… Collections from VAT are already funding vital government programs as part of the general fund, which the government cannot afford to lose,” DOF’s legislative liaison specialist Jeanne Guinto added.
She noted that the footwear industry is eligible to avail of the benefits under the Philippine Creative Industries Development Act, which include infrastructure support, research and development, and digitalization.
She noted that the footwear industry is eligible to avail of the benefits under the Philippine Creative Industries Development Act, which include infrastructure support, research and development, and digitalization.
“While we do recognize the objective of the bill to strengthen our footwear, leather goods and tannery industry, we find the proposal no longer necessary as RA 11904 or the Philippine Creative Industries Development Act already caters to its development, along with other creative industries,” Guinto said.
“While we do recognize the objective of the bill to strengthen our footwear, leather goods and tannery industry, we find the proposal no longer necessary as RA 11904 or the Philippine Creative Industries Development Act already caters to its development, along with other creative industries,” Guinto said.
“We would like to suggest for the industry to explore these opportunities which are readily available to them, so we will no longer require any form of legislation. This will also prevent the government from providing redundant support services,” she added.
“We would like to suggest for the industry to explore these opportunities which are readily available to them, so we will no longer require any form of legislation. This will also prevent the government from providing redundant support services,” she added.
But the bill’s author, Marikina 2nd District Rep. Stella Quimbo pointed out that at the moment, there is no budget specifically intended to support the footwear industry.
But the bill’s author, Marikina 2nd District Rep. Stella Quimbo pointed out that at the moment, there is no budget specifically intended to support the footwear industry.
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Quimbo appealed to the DOF and the Department of Budget and Management to coordinate with the National Economic and Development Authority and the Department of Trade and Industry to determine specific ways to support local industries and how to raise funds for these initiatives.
Quimbo appealed to the DOF and the Department of Budget and Management to coordinate with the National Economic and Development Authority and the Department of Trade and Industry to determine specific ways to support local industries and how to raise funds for these initiatives.
“Ano ba talaga ang industrial policy ng ating gobyerno? … According to NEDA mayron naman. Ano ‘yung funding for that? Kasi hindi naman tayo magkakaroon ng industrial development kung wala tayong funds, and that’s really why I filed this bill,” she explained. “Kung kumokolekta ka ng buwis dahil maraming pumasok na imported footwear, edi ‘yung a portion of that gamitin to support our local industry."
“Ano ba talaga ang industrial policy ng ating gobyerno? … According to NEDA mayron naman. Ano ‘yung funding for that? Kasi hindi naman tayo magkakaroon ng industrial development kung wala tayong funds, and that’s really why I filed this bill,” she explained. “Kung kumokolekta ka ng buwis dahil maraming pumasok na imported footwear, edi ‘yung a portion of that gamitin to support our local industry."
“Nagbibigay kayo ng statement on the bill, without even looking into it. Hindi ba dapat alamin n’yo muna, magkano ba ang ini-earmark, magkano ‘yan historically, bago nyo sabihin na huwag? Sana maging mas maging data-driven naman ang ating recommendations moving forward,” she told the DOF.
“Nagbibigay kayo ng statement on the bill, without even looking into it. Hindi ba dapat alamin n’yo muna, magkano ba ang ini-earmark, magkano ‘yan historically, bago nyo sabihin na huwag? Sana maging mas maging data-driven naman ang ating recommendations moving forward,” she told the DOF.
Quimbo also stressed the importance of the bill to complement the CREATE law.
Quimbo also stressed the importance of the bill to complement the CREATE law.
“For instance, industry players will be given preferential access to credit through low-interest loans from Landbank, DBP, and the Small Business Corporation. Other support includes marketing and promotional campaigns, green lane servicing in government transactions, and access to foreign markets. We need to be able to promote import substitution, which means, domestic firms should be able to produce and compete against imported finished products, and eventually export to the world market,” she said.
“For instance, industry players will be given preferential access to credit through low-interest loans from Landbank, DBP, and the Small Business Corporation. Other support includes marketing and promotional campaigns, green lane servicing in government transactions, and access to foreign markets. We need to be able to promote import substitution, which means, domestic firms should be able to produce and compete against imported finished products, and eventually export to the world market,” she said.
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“Pangarap namin na bumalik ang dating sigla ng Marikina Shoe Industry, kung saan umaabot sa kabilang dako ng mundo ang ating dekalidad na produkto. Dapat matatag ang industriya ng sapatos sa Pilipinas para hindi na natin angkatin pa ang sapatos na kayang-kaya naman gawin ng Pinoy,” the lawmaker added.
“Pangarap namin na bumalik ang dating sigla ng Marikina Shoe Industry, kung saan umaabot sa kabilang dako ng mundo ang ating dekalidad na produkto. Dapat matatag ang industriya ng sapatos sa Pilipinas para hindi na natin angkatin pa ang sapatos na kayang-kaya naman gawin ng Pinoy,” the lawmaker added.
"Siyempre maganda rin na humabol sa Vietnam na ngayon ay Top 2 exporter ng sapatos sa mundo. House Bill No. 491 is key to this endeavor."
"Siyempre maganda rin na humabol sa Vietnam na ngayon ay Top 2 exporter ng sapatos sa mundo. House Bill No. 491 is key to this endeavor."
The committee created a technical working group to review the measure.
The committee created a technical working group to review the measure.
Read More:
Congress
Marikina shoes
Department of Finance
Bureau of Treasury
Competitiveness Enhancement Fund
Stella Quimbo
Congress
Philippine footwear
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