THE Federation of Philippine Industries (FPI) has proposed to President Gloria Macapagal-Arroyo the passage of a directive asking all government agencies and offices to procure and use locally-manufactured products to lessen our dependence on imports, deter smuggling, and save on dollars.
FPI president Jesus Arranza said the group also proposed to the Department of Trade and Industry the conduct of a study to identify and promote products produced locally that could substitute imports.
Calling for import substitution on government procurement will not be in violation of the World Trade Organization (WTO) as the Philippines is not a signatory to the organization when it comes to government procurement, Arranza said."This is a timely call as it is equally beneficial to both government and local industry in supporting the Administration’s ten-point economic agenda to help resolve the country’s rising budget deficit through increased tax collections.Encouragement of import substitution will significantly conserve the country’s foreign exchange reserves," he explained.
Arranza added that Philippine manufacturers are capable of producing high-quality and world-class construction and non-construction products which are readily sufficient to met government needs. Arranza said under FPI’s proposal, procurement and use of imported goods by government agencies may be allowed only if the product is not locally available, is produced insufficiently, is not price competitive, or if the locally manufactured product is not within the standards required by the domestic user.
Arranza said the import substitution measure, which could be implemented through a presidential executive order, is being supported by the Federation of Filipino-Chinese Chamber of Commerce and Industry Inc.
