In a report to Trade and Industry Secretary Cesar V. Purisima, who chairs the DTI attached agency Philippine International Trading Corp. (PTIC), the PTIC said the savings were results of the government’s aggressive efforts to integrate counter-trade in major imports of government agencies and offices.
The PTIC is the agency tasked to carry out international trading through a counter-trade program.
Counter-trade is an international transaction and agreement wherein the government purchases goods and/or services from a client country in exchange for the client country’s commitment to purchase goods and/or services from the Philippines.
The PTIC packages, manages and monitors the implementation of the counter-trade program by initially identifying the goods of services whose exports would achieve incremental value.
Counter-trade transactions addresses trade imbalances between the Philippines and other countries.
The PTIC pointed out that he $204 million savings in 2002 and 2003 were much higher compared to the $300 million saved from counter-trade over a 12-year period up to 2001.
The PTIC believes the savings could still rise in the medium-term with the decision of various government agencies to tender international transactions.
The PTIC also noted that the decision of the Department of Energy to subject to counter-trade the fuel requirements of the National Power Corp. for 2004 to 2006 would add to the incremental savings the government would generate out of counter-trade deals.
Of the $204 million in savings, $133.6 million were derived from the government’s importation of rice ($107.7 million) from Vietnam, India, China and Thailand; search and rescue vessels ($18 million) from Australia; weapons/ammunitions ($4.5 million) from Canada, Belgium and Italy; coal ($3 million) from Indonesia; and patrol cars ($400,000) from Japan.
The remaining $70.4 million involves importation of rice, coal and various defense equipment and supplies for the Armed Forces of the Philippines’ modernization program.