The Strategic goods export authorizations issued by the Department of Trade and Industry – Strategic Trade Management Office (DTI-STMO) last year was able to generate USD4.5 billion in revenues, a significant increase as compared to the previous year’s export value of USD3.6 million which was based on reports submitted by exporters to the DTI-STMO.
Exports of information security systems, equipment, and components account for 98% of the overall value, with semiconductors and integrated circuits occupying the remaining 2%. The United States is the top country of destination in terms of strategic goods exports, accounting for 60% of the total value which is followed by Japan (21%), Singapore (5%), South Korea (4%), and China (3%).
Under Republic Act No. 10697 also known as the Strategic Trade Management Act (STMA), strategic goods are defined as products that, for security reasons or due to international agreements, considered to be of such military importance that their export is either prohibited altogether or subject to specific conditions. Under the said law, the DTI-STMO is mandated to regulate and authorize the export of strategic goods.
“We are pleased that through the efforts of DTI and its partner agencies in the National Security Council – Strategic Trade Management Committee (NSC-STMCom), we have been able to leverage our strategic trade regulatory regime in order to convince more manufacturers to engage in strategic goods export. This is in line with the Strategic Trade Management Act’s mandate of promoting economic growth by facilitating trade and investment in strategic goods while also meeting the country’s international obligations to implement effective measures aimed at preventing the proliferation of weapons of mass destruction and their delivery systems.” said Trade Secretary Ramon Lopez.
Likewise, Undersecretary Ceferino S. Rodolfo said that “Increased confidence in the Philippines as a safe and secure investment location for strategic goods manufacture and cross-border trade is reflected in the surge of strategic goods exports. This is excellent news, especially considering the economic downturn brought by the COVID-19 pandemic and the preventive measures implemented to contain it. We value the confidence that investors have placed upon us because this will pave the way for the full economic recovery of the country”.
It can be recalled that the Philippines was also named the most improved country in the implementation of Strategic Trade Controls as stated in the 2021/2022 Peddling Peril Index (PPI), with the country moving from 86th to 49th position in 2021. The said report assesses 200 nations based on their strategic trade control adoption, implementation, and enforcement.
“We worked closely with exporters to ensure their compliance with regard to existing policies such as the STMA. This initiative facilitated the export of strategic goods which resulted to additional revenues for the exporters. We recognize the important contribution of strategic goods exporters to the country’s economic recovery, following the COVID-19 pandemic’s adverse effects.” added Director Luis M. Catibayan of DTI-STMO.
Additionally, intangible transfers of technology which is a subset of strategic goods generated USD650,000 worth of new investments in 2021. This includes nuclear energy contracts won by business process outsourcing companies which provide services to firms and corporations in other countries.
In October 2019, the DTI-STMO began accepting applications for the registration of firms that intend to engage in cross-border strategic goods trade. Likewise, it began accepting applications for authorization to export dual-use goods in July 2020. Currently, the DTI-STMO has issued 13 export authorizations and registered 46 companies that intend to engage in or are currently engaged in cross-border trade of strategic goods. (30)
