from page 1..... FPI pushes passage

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2009 Official Publication of The Federation of Philippine IndustriesOfficial Publication of The Federation of Philippine Industries 2009

HighlightsInside pages

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Taxes and Aspirationby George S. Chua

Jess Arranza is new CIIF President

FPI pushes Anti-Smuggling Bill

FPI ask’s gov’t to invoke Article 23 of ATIGA

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OFFICE OF THE OMBUDSMAN AND FPI SIGN PACT AGAINST CORRUPTION

Memorandum of Agreement (MOA) was signed last December 3, 2009 by the Office of the Ombudsman (OMB) and the Federation of Philippine Industries for a partnership against corruption in the business sector and in its

transactions with the government. Ombudsman Ma. Merceditas N. Gutierrez and FPI President Jesus Lim Arranza lead the signing of the MOA at Club Filipino, Annapolis St., Greenhills, San Juan City.

The MOA marks the very first time in the country’s history that the government and the private sector have joined hands to fight corruption in the business sector and in its dealings with government agencies and offices.

Under the deal, the Office of the Ombudsman will conduct activities in coordination with FPI that will promote integrity in the business sector, evaluate reports on the incidents and causes of corruption, and facilitate monthly meetings with FPI for the adoption of a monitoring plan.

For its part, FPI will facilitate the development and implementation of integrity policies in accordance with

hirty eight (38) members of the Federation of Philippine Industries (FPI) that are signatories to the FPI Statement of Commitment

to Sustainable Development have initiated a survey among themselves to determine a baseline data for current and future sustainable development projects.

Ernesto Ordoñez, president of the Cement Manufacturers’ Association of the Philippines (CEMAP) and FPI director and chairman of the Sustainable Development Committee, encouraged the members to participate in the survey and come up with accurate capabilities and thrust of the business sector to enhance sustainable development initiatives.

On top of establishing a baseline data, awards will also be given to FPI members who excel in four categories of sustainable development: corporate social responsibility related to the environment, management of wastes and emissions, use and recycling of raw materials, and workers’ health and safety.

“The FPI sustainable development program declares in its vision statement that industries undertake development which meets the needs of people living today without compromising the ability of future generations to

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the United Nations Convention against Corruption (UNCAC), and promote the adoption of the Code of Conduct of the Asia Pacific Economic Cooperation (APEC).

FPI will support the Ombudsman in the discharge of its functions, particularly by providing technical expertise and complementary personnel in the investigation and prosecution of graft and corruption cases. Moreover, it will monitor and report to the Ombudsman incidents of bureaucratic inefficiency, red tape, mismanagement and violations of law observed in the agencies/offices where its members transact business.

During the signing ceremony, FPI Director Ernesto Ordoñez made the welcome remarks followed by the speeches of FPI President Arranza and Ombudsman Gutierrez.

All three speakers expressed the hope that the FPI-OMB partnership would go a long way in weeding out corrupt practices in the country, especially in

he Federation of Philippine Industries (FPI) expressed its unequivocal support for the passage of Senate Bill No. 3417 and House Bill No. 5971, both of which seek to establish a framework for responsible and accountable trade negotiations through the creation of the Philippine Trade

Representative Office (PTRO).

For the past couple of decades, trade negotiations had been conducted on an ad hoc basis which prevented the attainment of coherence in trade and development policies. In more recent negotiations, transparency and accountability have been demonstrated to be lacking, hence necessitating the filing of cases by some stakeholders before the Supreme Court to question the constitutionality of key provisions in the agreement. Furthermore, the pattern of consultations being conducted leaves much to be desired as stakeholders were being requested to submit their comments on trading arrangements about to be signed without providing them copies of the agreements.

Clearly there has to be a paradigm shift in the way trade policy formulation and trade negotiations are being carried out. The benefits and costs of entering into trade agreements need to be clearly and scientifically determined through in-depth economic, social and legal studies.

The wisdom behind these pending bills is highlighted with Sen. Mar Roxas himself authoring Senate Bill No. 252 which is the precursor of SB 3417. As a former DTI Secretary who headed the Philippine negotiating team in various international trade engagements, Sen. Roxas’ valuable insights can only point to the much needed improvements the country needs to ensure that Philippine national interest is preserved in an institution such as the PTRO.

As the voice of industry, the FPI has consistently taken an active part in helping both chambers of the legislature craft these bills. With more trade arrangements being envisioned and with the growing complexities of implementing and navigating through the current bilateral, regional and multilateral trading arrangements, the Philippine Trade Representative Office should be enacted into law and constituted as soon as possible. - Mario Jose Sereno

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FPI spearheads sustainable development survey among

local industriesmeet their own needs,” Ordoñez and FPI President Jesus Lim Arranza said in a letter to the 38 FPI members.

“We want to establish commonalities and areas of reciprocity among various industries in the four categories of sustainable development,” they added.

In its mission statement, FPI recognizes the need to identify the key issues it faces on sustainable development and find the potential solutions to the challenges they pose. FPI’s current priorities include reduction of pollution through effective waste and emission management, efficient use of raw materials, fuels, water and other utilities, and prevention of work-related accidents and illnesses.

Moreover, FPI members are engaged in corporate social responsibility projects on livelihood and income generation. These projects aim to alleviate poverty and ultimately reduce people’s overdependence on environmental resources with limited renewability.

Ordoñez said that all the information gathered through the survey will be used as one of the basic reference materials in the selection and awarding of the best sustainable development projects which will be conducted in the first quarter of 2010.

E d i t o r i a l B o a r dEXECUTIVE EDITORS: Jesus Lim Arranza, Henry A. Tañedo, George S. Chua, Renato R. Ermita.

Conributors: A. Articles-

Atty. Rufino M. Margate, Jr.Secretary General

Jaime E. Escober Jr.Technical Staff

B. Technical Inputs-

Judanito F. YapIT Specialist

C. General Services-

Ellen R. CusilitCommunications and Follow-up Calls

Judanito F. Yap & Allan A. Salvador Materials Distribution

Roger A. PalagtiosaAccounting Functions

Continued on page 8

Dindo C. MerceneConcept and Layout-Design

Cover & PagesPrinters

The Tambuli Magazine, entered as a third-class mail matter at the Makati Central Post Office and published once a month, is the official publication of the Federation of Philippine Industries, Inc. (FPI), with editorial office office located at Unit 701 Atlanta Centre, #31 Annapolis St., Greenhills, City of San Juan, Philippines. Tel. Nos.: 772-3409: 722-9737; 584-9642 Fax: 727-4359 Email: fpi@fpi.ph / fpi@philonline.com / Website: www.fpi.ph

government transactions with the private sector.

Ombudsman Gutierrez explained that businessmen are exposed to corruption irregularities in “vulnerable agencies such as the Bureau of Internal Revenue, Bureau of Customs and Local Government Units.” She was hopeful, however, that with the partnership, FPI and the OMB could “combine power and resources” against “recurring issues on integrity” in these

government agencies or units.

Ombudsman Gutierrez added that with the help of FPI, the OMB would be able to “accurately point out corrupt activities in the business processes, identify its perpetrators, investigate and prosecute them.”

The anti-corruption deal was signed following reports identifying corruption as the most problematic factor for doing business in the Philippines. – Jaime Escober, Jr.

BUY PINOYBUY LOCAL

BUY PINOYBUY LOCAL

FPI supports creation of Philippine trade representative office

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2009 Official Publication of The Federation of Philippine IndustriesOfficial Publication of The Federation of Philippine Industries 2009

FPI asks gov’t to invoke article suspending concessions in ASEAN trade deal

FPI has appealed for the government to invoke an article in the ASEAN Trade in Goods Agreement (ATIGA) that would allow for the temporary

suspension of the country ’s tariff commitments under this agreement. The Federation made this appeal in a letter to President Gloria Macapagal-Arroyo last October 16, 2009, citing the extreme circumstances resulting from the devastation of the recent national calamities. It said that invoking Article 23 on the Temporary Modification or Suspension of Concessions of ATIGA would allow a period of recovery for the different sectors ravaged by typhoons Ondoy and Pepeng before providing total access into the Philippine market for imported goods originating from ASEAN beginning January 1 2010.

Based on records, the Philippines ratified the ATIGA on February 26, 2009. Article 23 of the ATIGA reads: “In exceptional circumstances other than those covered under Article 10, Article 24 and Article 86 where a Member State faces unforeseen difficulties in implementing its tariff commitments, that Member State may temporarily modify or suspend a concession contained in its Schedules under Article 19.” The concessions covered by Article 19 deals with Reduction or Elimination of Import Duties.

Mr. Jesus Lim Arranza, FPI President, noted that the devastation wrought by typhoons “Ondoy” and “Pepeng” in Metro Manila and Northern Luzon is unmatched in recent history. He cited estimates of the Office of Civil Defense that the damage of both

typhoons was close to PhP30 billion.

“Aside from lives lost, this damage covers manufacturing and agricultural businesses including key capital assets, crops, infrastructure, livestock and irrigation equipment, livestock and poultry supplies, vegetables, etc. We can and we will recover from these successive calamities, but the recovery requires time—time to secure credit, repair damage or construct new assets, plant or raise stocks, and connect with old and secure new customers,” Mr. Arranza said.

In her speech during the BSP Economic Briefing last October 14, 2009, President Arroyo mentioned that the nation had not fully recovered from the devastation of typhoon Frank which in June 2008 caused damage amounting to PhP13.525 billion.

Mr. Arranza said that because of the recent string of natural calamities culminating in “Ondoy” and “Pepeng, the country would have to content with an “unprecedented and gargantuan” reconstruction and rehabilitation in the next few years, even as the global financial crisis continue to worsen our national deficit now estimated to be between PhP250 billion to PhP300 billion.

He said that exposing our basic industries to the influx of imported goods—when such industries provide employment and livelihood to tens of millions of Filipinos at a time when they are recuperating and therefore most vulnerable—would not serve the national interest and would derail any hope of effective and timely rehabilitation, adding that domestic industries also

contribute hundreds of millions in government revenue.

Mr. Arranza said that FPI recognizes the country’s tariff commitments under the ASEAN Free Trade Area, in particular to its ATIGA component.

“However, the ATIGA itself allows a degree of flexibility from implementing commitments to reduce tariffs when a country is faced with exceptional conditions and unforeseen difficulties. Article 23 of ATIGA legally allows the Philippines to temporarily modify or suspend its tariff reduction obligations due to emergency or exceptional circumstances other than those covered by Article 10 on Measures to Safeguard the Balance of Payments, Article 24 on Special Treatment on Rice and Sugar, and Article 86 on Safeguard Measures,” he argued.

FPI said that the devastation wrought by Ondoy and Pepeng is exceptional, because of which Philippine industries will encounter additional and previously unforeseen difficulties when the tariffs are reduced or eliminated.

Mr. Arranza said that the situation to operate and invoke Article 23 fits the present state of calamity of the country, which is precisely the intent why ASEAN included such provision in the agreement. He added that invoking Article 23 will indicate that the Philippines seriously considers provisions of international agreements it has acceded to and shows that its leaders have a keen mindset to take advantage of permissible legal avenues in aid of its people in distress. - Mario Jose Sereno/Atty. Jesus Barrera

comments of both parties. Thereafter, FPI forwarded a copy of the original matrix to the said committees on August 10, 2009. As a result of the last meeting between the FPI representatives and Mr. Parayno last August 8, 2009, FPI came up with an updated matrix that shows the unresolved issues and clearly identifying the provisions that will be deemed inconsistent with the RKC.

However, despite these unresolved points, a copy of a Q and A Primer (Revised Edition) dated August 2009 and entitled “Accession to the Revised Kyoto Convention (RKC) What’s in it for the Philippines”, on page 19 in its discussion of opposition under “Stakeholder Analysis”, states the following:

“Opposition has come from representatives of the Federation of Philippine Industries and the Alyansya Agrikultura who expressed their apprehension that accession to RKC could result in the

relaxation of controls and give way to increased smuggling. Subsequent discussions have shown these apprehensions to be without basis.” [Emphasis supplied.] The last statement in bold font is a public and malicious gross misrepresentation of the status of discussions held. Thus, FPI made an emphatic demand from the various government agencies and stakeholders supporting the RKC to immediately recall and rectify this malicious gross misrepresentation in the primer since it caused dishonor, discredit and contempt to the Federation. – Atty. Rufino M. Marga te, Jr.

t is a fact that the coconut (scientific name Cocos nucifera) is a well-known tropical tree mostly found in the Southeast Asian countries.

Aside from its decorative usage, this “tree of life” (as the coconut is considered) is a good source of food, medicine, fuel and materials for shelter, to name a few.

Coconut oil, which is internationally known as the copra oil, is one of the leading exports of the Philippines to parts of Europe, North America, Middle East and Asia. However, massive cutting of coconut trees for use as “coco” lumber and the growing number of senile coconut trees have become the top problems coconut farmers now face.

This alarming situation prompted coconut farmers to seek government’s help in obtaining farm tools and implements, technology and funding, and “go back” to their farmlands.

During a Cabinet meeting in 2007, President Gloria Macapagal-Arroyo directed Agriculture Secretary Arthur Yap to conceptualize a program that would address the coconut farmer’s plight and which would increase and improve coconut production. Thus, the Coconut Farm Development Program (CFDP) was formally born and launched.

To invigorate the government’s priority agenda on developing 1.3 million coconut hectares, new technology implementation and job creation/generation, President Macapagal-Arroyo approved the allocation of P1.0 Billion for the implementation of the CFDP.

The CFDP, which is primarily being implemented by the CIIF Oil Mills Group now led by its new President and CEO, Jesus L. Arranza, includes the following components: 1) Planting and Replanting, 2) Intercropping, 3) Value-Adding (Quality Copra Processing and Husk Shell Processing), and 4) Agribusiness Centers.

The Components

Coconut Planting and Replanting is being implemented by establishing coconut nurseries with a capacity of about 100,000 seed nuts per nursery site. Technical support is extended by Philippine Coconut Authority (PCA) technicians

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The Coconut Farm Development Program: modernizing the coconut industry By Arleth A. Mendoza

CIIF Oil Mills Group, Policy & Strategy Group

and Municipal Agricultural Officers of the Department of Agriculture. Through training and consultation, coconut farmers are taught effective and good crop management skills. This component also answers the need to replace senile trees and give new light to the dawning coconut industry.

Intercropping in-between coconut trees, an important component of the program because it is a sure way to increment farmers’ income, involves the propagation of suitable perennial crops and livestock. Also, the provision of farm inputs is part of this component and is geared towards the rehabilitation of at least 40,000 coconut hectares.

TOP TEN COCONUT PRODUCERS

The value-adding component is meant to ensure continued supply of premium quality coconut oil for export and domestic consumption. Husk and shell processing provides for the distribution of and funding for decorticating units. This would generate employment for coconut fiber and coco peat (as organic fertilizer) production. Along this line is development of experimental carbonizers for charcoal or activated carbon processing which is now in-demand as alternative fuel.

The establishment of the coconut farms information network by means of the online E-Pinoy Farms was added to ensure an effective and efficient farm management and market development. Moreover, the objective of the agribusiness kiosk is to professionalize our coco farmer organizations by providing them access points to build up the baseline data of their farmer membership as well as transactional data for their trading transactions. Through these access points, farmer organizations will be able to store, update, access and share mission-critical data information on production-related transactions.

To put more impact and strengthen the advocacy in sustaining the industry, the CIIF Oil Mills works closely with Department of Agriculture/ PCA to effectuate coconut tree planting and replanting, salt fertilization, coconut-corn intercropping and coconut pest management to eradicate Brontispa longissima, a leaf-eating beetle that causes serious damage to coconut palms.

Source: Food and Agricultural Organization of the United Nations: Economic and Social Department: The Statistical Division

Legend: No symbol = official figure; P = official figure; F = FAO estimate; * = Unofficial/Semi-official/Mirror data; C = Calculated figure; A = Aggregate (may include official, semi-official or estimates)

COUNTRY PRODUCTION TONNES FOOTNOTE

Philippines 17,000,000 *

Indonesia 15,580,000 P

India 9,400,000 F

Brazil 2,770,554

Thailand 1,705,446

Vietnam 962,000 F

Sri Lanka 954,000

Papua New Guinea 677,000 F

Malaysia 568,000 F

Myanmar 370,000

WORLD 547,164,444 A

COMPONENTS No. of Local Government Units

No. of Cooperative/ Farmer Organizations

State Universities & Colleges

Diocesan Social Action Centers TOTAL

Planting & Replanting 40 159 23 1 223

Other Crops: 4 49 5 0 58

Value Adding:a. Kukum Dryerb. Decorticating Machine

• Integrated coconut processing

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0

176

2

01

0

077

0

1787

2

Agribusiness Kiosk 2 47 1 0 50

TOTAL 49 280 30 78 437

SUMMARY: PROGRAM PARTNERSAs of June 30, 2009

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2009 Official Publication of The Federation of Philippine IndustriesOfficial Publication of The Federation of Philippine Industries 2009

The FPI-TESDA-PSMA Competency Upgrade Project – Enhancing Productivity & Human Resource toward Global Competitiveness

FPI pushes passage of Anti-Smuggling Bill before RKC ratification

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resource in the critical areas of its operation, followed by the actual transfer of knowledge and technical skills, would redound to the firm’s advantage in terms of enhanced efficiency, greater productivity and better quality in its products (or services).

Furthermore, on the salient aspect of industry-level sustained competitive edge, the training regulations to be developed pertinent to the sugar milling and refining operations standardizes the required skills, competencies and qualifications applicable across the whole of the sugar industry in the Philippines.

Thus actually developing and promulgating said training regulations will lead to these concrete results: i) higher levels of efficient operational processes can be achieved, on a sustained basis, in the manufacture of products that conform to globally accepted quality standards; ii) the sugar industry’s human resource will become at par with the global benchmark; iii) the issue of worker turn-over will be addressed; and iv) more employment is generated.

Moreover and no less important is the possibility of replicating the undertaking in other industries within the FPI membership. If this happens, it can be construed that the overall positive outcome will not only be a robust firm. FPI being the representative of the manufacturing sector in the Philippine economy, enhancing the human resource of its member-industries will develop their competitive edge and make the country become an active player in the world economy. - Bernard M. Feliciano

he newly formed partnership that came out between FPI and its member the Philippine Sugar Mills Association (PSMA) on the one hand, with the Technical Education and

Skills Development Authority ( TESDA), on the other hand, can be construed as a cornucopia

n its advocacy to check the serious and rampant smuggling in the country, FPI is strongly pushing for the immediate passage of the Anti-Smuggling Bill before the Revised

Kyoto Convention (RKC) is ratified, because of contradicting provisions in these two bills.

FPI emphasized that there is absolutely no urgency to ratify the RKC considering that even after 10 years from its adoption by the World Customs Organization in June 1999, only 64 members out of 175 have ratified the RKC as of August 3, 2009.

of potential benefits advantageous to the stakeholders comprising the fellowship.

In general, FPI and PSMA stand to gain from TESDA’s institutional expertise and resources. More specifically, this means, for one, that on the inveterate issue of labor-management relations at the firm level, the partnership promises to make it possible for management to engage the active participation of their workforce (and unions, if present) in a conducive high-trust and mutually beneficial enabling work context.

This would be the case because, organizationally speaking, upgrading the competency standards of the firm’s human

Editor’s note: The FPI-TESDA partnership on upgrading the competency of workers in the sugar industry has already finished the workshop on job functions that are crucial to the operations of a sugar plant and will now proceed to the development of training regulations. The article below cites the importance of the partnership and the competency project.

In as much as the RKC by operation of international law will impinge on the legislative powers of Congress to pass statutes that will address present and future concerns affecting customs procedures and the protection of government revenues at the border, FPI submits the position that the Anti-smuggling Bill, which would tremendously plug the loopholes in the current law, should have clear priority over the RKC.

FPI had previously conveyed during the joint hearings of the Senate Committee on Ways & Means and the Committee on Finance that action on the RKC be deferred

considering the serious impact the treaty provisions will have on the Anti-smuggling Bill which is presently still being crafted.

In the last hearing of the Committee on Foreign Relations which is chaired by Sen. Miriam Santiago, she instructed FPI and the Alyansya Agrikultura to discuss these issues with Mr. Guillermo Parayno, Jr., purportedly the head of the coalition pushing for the ratification of the RKC. FPI had two meetings with Mr. Parayno and had been guided by a matrix of concerns showing the affected provisions of the Anti-smuggling Bill and the respective

hat is the relationship between taxes and aspiration? A lot of you will probably say that most of us aspire not to pay our taxes. When you think about it, there is a lot of truth in that. After all, there is no positive advantage given to

a conscientious tax payer to someone who does not even bother to register to pay taxes. Paying taxes has become equated by most people as something negative. Just paying taxes requires a lot of effort for the tax payer or the withholding agent. Starting off with filling out the rather lengthy forms and providing the required attachments, then lining up to actually file the forms and make the payments. This should really be simplified and made more taxpayer friendly but that is another story.

Is there something that can be done for people to actually want to pay their taxes? Sure there is, but only if the government and lawmakers decide that it is about time to do something about it. With tax collection efficiency going down, the tax base eroding and the Bureau of Internal Revenue falling short of collection targets, it certainly is about time to do something for people to want to pay their taxes.

The BIR must come up with ways to provide incentives to people to pay their taxes and certainly more than their “premyo sa resibo” program where people use receipts as raffle coupons. This program does not actually provide any incentive to the tax payer, as a matter of fact, I doubt if the raffle winners are even tax payers. It is about time for the government to give back something directly to the taxpayer by treating them like a VIP.

In the commercial world, the best customers are given the best service and the best deals available. Individual taxpayers should be treated the same way and the more they pay taxes the better treatment they get and they should also get entitled to certain privileges and benefits. Keeping track of the taxes paid by the individual should

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TAXES AND ASPIRATIONbe done on a cumulative basis so that it establishes the legitimacy of where all his money came from and still be properly acknowledged by the government when he decides to stop working due to retirement, health reasons or simply enjoy the fruits of his labor.

What are some of the things that the government can do to reward the conscientious individual taxpayer? Several things immediately come to mind, depending on the cumulative taxes the individual has paid, make the renewal cycles for licenses, permits and documents much longer for the better taxpayer. If for example a driver’s license is normally good for 3 years, anyone who has paid more than a million pesos in taxes in his lifetime should be given a license for 4 years and an additional year for every additional million pesos in taxes he has paid. If you can give a person a permanent TIN ID and he pays so much in taxes, I think the least the government can do is to reciprocate and give that taxpayer an extended passport, firearms license, professional license and whatever other documents it issues that is periodically renewed.

Another thing that the government can provide is a special help desk or one stop shop for taxpayers who have earned the right to be treated like a VIP. Similar to banks that have private banking clients who get their own special place and private bankers who provide personalized service where you do not have to line up for anything, instead you are serviced from the comfort of your couch while drinking coffee. If the BIR can afford to spend millions of pesos for raffle prizes, it should be able to afford to treat their good taxpayers much better. These help desks should be able to help the VIP taxpayer with all his government related transactions, such as paying his real estate taxes, dealing with the SSS, Phil-Health, Pag-IBIG, license renewals and so on.

If the government is really serious about controlling money laundering, what better way than to require the matching of tax payments and asset acquisition, such as homes, cars, and other big ticket items. How can anyone justify his acquisition of a million peso car if he has never paid a single centavo in taxes? More so when non-taxpayers are able to acquire million-dollar homes and yachts. Hopefully, this should expose people who have acquired their funds through illegal means and put an end, if not slow down criminality and corruption.

The government and specially the BIR should treat its taxpayers like the goose that lays the golden eggs and not as milking cows to be exploited. The stick has been used for a very long time and it has only been effective in corrupting the whole system, it is about time the carrot is used to make the people aspire to become legitimate taxpayers.

(Comments may be sent to chua.george@yahoo.com)

* This article is a reprint of Mr. Chua’s Manila Bulletin column “Business Options” on November 24, 2009.

By George S. ChuaFPI Director and Treasurer,

FPI Management Committee Chairman

2009 Official Publication of The Federation of Philippine IndustriesOfficial Publication of The Federation of Philippine Industries 2009

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esus Lim Arranza, the president of the Federation of Philippine Industries (FPI) has been appointed by President Gloria Macapagal-Arroyo as the new President and Executive Officer (CEO) of the CIIF

Oil Mills Group (OMG).

Jess Arranza, as friends fondly call him, takes pride in heading the CIIF OMG that constitutes the biggest and the most integrated conglomerate in Philippine coconut industry.

The CIIF conglomerate

The CIIF OMG that Jess Arranza heads is composed of 5 oil mills with an aggregate work force of 372 personnel. These oil mills which were acquired using the so- called Coconut Industry Investment fund, one of the coco levy funds, are:

• Legaspi Oil Company, Inc.• San Pablo Manufacturing Corporation• Cagayan de Oro Oil Co., Inc.• Southern Luzon Coconut Oil Mill, Inc.• Granexport Manufacturing Corporation

The CIIF OMG plants at Arimbay, Legaspi and Cagayan de Oro had been inactive for so many years but were re-commissioned in August after Jess Arranza assumed the presidency of CIIF.

All in all, these plants have a combined crushing capacity of 750,000 metric tons of copra with a refining capacity of 280,500 metric tons of different grades of processed coconut oils. The produce, coconut oil and copra meal, are exported mostly to the United States, Canada, Western Europe and Japan, accounting for the biggest in volume and in value of the country’s traditional exports.

CIIF also leads the value adding of traditional coconut products such as the conversion of coconut husks, coconut shell and coconut water into commercial uses. Needless to say, the popular local brand Minola coconut edible oil

dominates the domestic market in the Philippines. However, Minola has also gained market niches in Canada, Hong Kong, Japan and the United States.

Another CIIF company, the Iligan Bay Express Corporation, with its fleet of inter-island ships, transports raw materials from the CIIF network of satellite buying stations in the countryside to the CIIF oil mills/refineries, conveniently located in coconut growing regions of the country.

Forty five years in the industry

Before his term in the CIIF, the company had lost an aggregate Php1.4 billion in the last two years. Jess Arranza said that the CIIF is in a recovery period and he is quite happy to announce that, although he

Jjust assumed the presidency on July 8, 2009, the company made a profit of P90 million for 2009.

This turnaround owes much to Jess Arranza’s 45 years of service in the coco industry, where he started as a research marketing guy in the Baguio Edible Oil. He has

worked his way up to become VP for Marketing of the San Pablo Manufacturing Corporation and finally left the firm as its President, and after he had made Minola the leading brand of coconut oil in the domestic market.

He has become an institution in the coco industry, having been Chairman for several terms of the United Coconut Associations of the Philippines (UCAP), as well as founding Chairman of the ASEAN Vegetables Oils Club (AVOC).

Now returning in the CIIF OMG as its President, Jess Arranza is fondly called by industry insiders as a balikbayan in CIIF. His long experience in the coco industry has stood him in good stead in terms of the practical knowledge and insight in managing the industry that he has gained along the way.

Helping the coconut farmers

Jess Arranza has been engaged in the coconut industry for over four decades now. Along the way, he has helped coco farmers build Cooperatives. Recently, in the Legaspi Oil Company in Arimbay, Legaspi City, he has inked an agreement with local coco farmer Cooperatives for them to supply copra to the Legaspi plant or to toll such copra for eventual export of the resulting coconut oil. This, Jess adds, is vertical integration where the coconut farmers as owners of the CIIF OMG can get more income from directly selling the refined oil to foreign buyers.

The CIIF OMG has also assisted coco farmers Coops, providing nurseries coco seed nuts and farm implements worth P2 million per Coop/site and enhancing President Gloria Macapagal-Arroyo’s Coconut Farm Development Program.

Moreover, the CIIF OMG is looking for possible additional livelihood programs for farmers such as propagating the use of coco-textile as anti-erosion material for use by DPWH and LGUs. He notes that coco-textile is already used to protect the slopes on the side of the Subic-Clark-Tarlac Expressway (SCTEX) and other world-class condo and recreational sites in the Tagaytay area. Pres. Arranza adds this would surely provide extra livelihood for coco farmers. – Jaime Escober, Jr.

Jess Arranza is the new CIIF Oil Mills Group President The CIIF Oil Mills Grouphe CIIF owns five companies traditionally engaged in the business of coconut oil milling.

• Legaspi Oil Company, Inc. • San Pablo Manufacturing Corporation

• Cagayan de Oro Oil Co., Inc. • Southern Luzon Coconut Oil Mill, Inc. • Granexport Manufacturing Corporation

The operating CIIF plants have a combined crushing capacity of 750,000 metric tons of copra with a refining capacity of 280,500 metric tons of different grades of processed coconut oils. This division accounts for the biggest in volume and in value of traditional products, such as coconut oil and copra meal mainly exported to North America and Eastern Europe. It also leads the value adding of traditional coconut products such as conversion of coconut husks, coconut shell and water into commercial uses. Its local brand MINOLA coconut edible oil dominates the consumer pack market segment with overall leadership in the Philippine edible oil business. Using its fleet of inter-island ships, another CIIF company, Iligan Bay Express Corporation, transports raw materials from the CIIF network of satellite buying stations in the countryside to the CIIF oil mills/ refineries conveniently located in coconut growing regions in the country. Serving not only the domestic but the global market as well, the CIIF Oil Milling Group has catered, in timely fashion over the years, to the coconut oil and copra meal needs of the world’s biggest and prestigious customers. The United Coconut Planters International (UCPI) France, a CIIF Company, serves as the marketing arm of Europe; whereas, Granex Corporation USA, a Granex subsidiary, with offices in San Francisco and New Jersey, serves the North American region. Backed up by UCPB, one of the nation’s largest banks, the CIIF oil Milling Group resolves to serve the world demand for fats and oils and animal feeds with a firm commitment to remain as a truly reliable and consistent supplier.

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VisionA vibrantly integrated coconut and other

palm-based group providing diverse quality

products, services and solutions to local and

global consumers and contributing to the

upliftment of quality of life of farmers and

other industry partners.

MissionWe delight our internal and external

customers through quality products and

services while growing profitably the business

for all its stakeholders as we continue to be the

coconut industry’s partner in the upliftment of

the lives of coconut farmers.

JESUS LIM ARRANZAFPI President and Chairman

of FPI Anti-Smuggling Committee