The wood industry said it is hoping for the passage of legislation on land and forest management, which it expects to attract investment in the forestry sector from both domestic and foreign sources.
“Those bills that have been sitting in Congress for so long (and I hope they are) passed, to encourage investors, foreign or domestic,” Charlie H. Liu, chairman of Philippine Wood Producers Association (PWPA), told BusinessWorld.
A number of bills are pending in Congress include the proposed National Land Use Act; the proposed Forest Limits Act, which allows Congress to delimit forest land and national parks where conservation measures will be in force; and the proposed Sustainable Forest Management Act, which seeks to prescribe sustainable forest management of former mine sites, as well as to regulate the use of forest resources, including those within ancestral land.
He said more business-friendly policies are needed at a time when Chinese companies are building their wood processing facilities in Vietnam to avoid tariffs imposed during the trade war.
“Four years ago, wood products (exported from China to Vietnam) were worth roughly about five billion dollars (SGD $6.9 billion). This year they will probably hit $10 billion (SGD $13.8 billion) and in the next five years it is estimated they will hit $20 billion (SGD $27.6 billion),” he said.
“This would have been an opportunity for us to go into wooden furniture,” he added. About 500,000 jobs can also be generated starting from planting trees, to harvesting, and processing these through an investment of P100 billion (SGD two billion) to reforest one million hectares of forest land.
Liu said that the industry was adversely affected by the implementation of Executive Order (EO) No. 23, which was signed Feb. 1, 2011 by President Benigno S.C. Aquino III. This forced manufacturers to depend on imported wood for processing into export furniture.
According to government data, in July this year, exported forest products accounted for only 0.5 percent of the $413.4 million worth of agro-based exports, which are dominated by coconut, sugar, and fruits and vegetables.
“I think for sure we are importing more than $200 to 300 million worth of forest products a year to supply our domestic market. This does not include importation for re-export,” Liu said, adding that suppliers are territories with sustainable forest farms in Europe, North America, and Australia. “Trees should be treated like agricultural products,” he said.
The EO declared a moratorium on the cutting and harvesting of timber in natural forests. This prohibits the Department of Environment and Natural Resources (DENR) from issuing new logging contracts or agreements in all natural and residual forests, as well as other agreements which would involve logging.
Issuing or renewing tree cutting permits is also prohibited under the EO, except for road clearing for right of way by the Department of Public Works and Highways, site preparation for tree plantations, and other activities that would require the need to cut trees, on condition that the logs will then turned over to the DENR for disposal.