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Local manufacturers cry for help vs unregistered appliances

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Paige Javier

ABS-CBN News

MANILA -- About 300,000 employees of local manufacturers of small appliances are at risk of losing their jobs due to supposed unfair online sales practices, according to a lawmaker.During the House Committee on Trade and Industry inquiry on Monday, ACT-CIS Party-list Representative Erwin Tulfo said local manufacturers appealed for lawmakers to take action as their industry continues to take a hit due to cheaper unregistered products in the online market.&quot;Their survival is being undermined by the flood of substandard and uncertified goods being sold through online platforms like Shopee and Lazada, often at suspiciously low prices. This is not just an issue of competition; it is an issue of fairness and survival,&quot; Tulfo said.&quot;Local manufacturers are being forced into an uneven playing field, unable to compete with unregulated goods that evade taxes and safety standards,&quot; he said in his opening statement.<div><iframe width="640" height="360" src="https://www.youtube.com/embed/1F5INW0c4Gk?&amp;wmode=opaque&amp;rel=0" frameBorder="0" allowfullscreen="" class="fr-draggable"></iframe> </div>&quot;How can we ask our local industries to comply with strict laws and pay their fair share of taxes while offshore brands bypass these same standards with impunity?&quot; the lawmaker asked.Tulfo said the issue was brought to his attention by the Association of Small Domestic Appliances of the Philippines.Caroline Yao, who is also CEO and President of Tough Mama Home and Kitchen Appliances, said their industry which employs 300,000 workers needs help.&quot;We have been very much affected by what is going on online since several years ago,&quot; she said.&quot;The government imposes, especially DTI imposes several regulations, especially on us brands. Before and after importation we go through several procedures before we can get the goods to legitimately sell in our markets like SM, Abenson and Automatic Center. These stores are very strict with us,&quot; she said.&quot;If we don&#x27;t have the sticker, they will not allow us to sell,&quot; Yao told lawmakers.&quot;It has come to our attention that there are a lot of substandard and also subsequently fake brands in the market that advertise themselves as a big brand but when you buy it, it comes out as unbranded appliances from China. All the legitimate businesses are affected that&#x27;s why we are asking the government for more support,&quot; she added.Yao questioned why regulators are strict with local manufacturers but it&#x27;s not the same for sellers in major e-commerce platforms like Lazada, Shopee and TikTok.<div><iframe width="640" height="360" src="https://www.youtube.com/embed/k1eiyh8WB_c?&amp;ab_channel=ABS-CBNNewsautoplay=1&amp;wmode=opaque&amp;rel=0" frameBorder="0" allowfullscreen="" class="fr-draggable"></iframe> </div>For its part, the Department of Trade Industry Fair Trade Enforcement Bureau (DTI-FTEB) said it has regulated and found violations in a total of 156,572 items as of October 2024. This is higher than the over 1,043 it seized and found violations in in 2023.<div><a href="https://news.abs-cbn.com/business/2024/10/2/new-law-imposes-vat-on-digital-services-1045" rel="noopener noreferrer" target="_blank">New law imposes VAT on Netflix, other digital services</a></div>&quot;As far as we&#x27;re concerned, we conduct surveillance and enforcement activities of the DTI, covering the products as mentioned like home appliances and kitchen appliances. We also file formal administrative charges and conduct adjudication,&quot; DTI-FTEB Director Regino Mallari said.&quot;Through the FTEB, we conduct online monitoring as well with 54 personnel. 40 personnel physical monitoring and 13 personnel online,&quot; he responded when asked if they inspect the products coming from offshore sellers.Rep. Tulfo said local manufacturers are asking for a level playing field in terms of compliance with local laws and regulations.&quot;The Department of Trade and Industry has already started drafting the policy on requiring online sellers of products that are under mandatory certification scheme of DTI to register with the DTI. Essentially pag di registered sa amin, the platforms must take them down. They should not be allowed to sell online,&quot; Atty. Cherryl Carbonell of DTI said.She said platforms will also be held liable and will face fines for non-compliance of the DTI&#x27;s notice to take down flagged sellers.Lawmakers said it&#x27;s a tall task for regulators to monitor compliance of all sellers on online platforms, especially offshore retailers. They also questioned if the Bureau of Customs can check all the products in the thousands of containers that enter the country&#x27;s ports.&quot;We have to craft a law not to allow these platforms to sell. Dito natin tatargetin sa Shopee, Lazada, TikTok and others. Dito natin sila hulihin. Kasi hindi niyo mahuhuli yung private merchants. These platforms allow them to sell… Unless we create a very strong law penalizing these illegal sellers, walang mangyayari,&quot; House panel chairperson Rep. Ferjenel Biron said.Rep. Tulfo questioned the three major e-commerce platforms for not following and implementing regulations under Republic Act 11967 or the Internet Transaction Act.He pointed out that most of the small appliances do not have Product Standard (PS) stickers, proof that the item went through DTI&#x27;s safety inspection.<a href="https://news.abs-cbn.com/business/2024/3/12/more-ph-local-brands-joining-lazada-ceo-1241" rel="noopener noreferrer" target="_blank">Lazada</a> said they compel online merchants to submit the necessary requirements.The majority of their sales of small appliances are from local manufacturers, while about 20 percent are from offshore merchants.&quot;With regard to cross border appliances, on our end, we do not abet and carry out illegal sales as much as possible. We require their registration, as much as we can, we ask for BIR registration, business information and all of those things,&quot; Lazada Government Affairs Head Kenneth Estiller said.Rep. Biron said e-commerce platforms should self-regulate to help the government.&quot;You yourself as a platform don&#x27;t do your job in ensuring that what is being sold in your stores complies with government regulations. Meaning, hindi parte ng requirement before ibenta yung product na ito, nakapagcomply na sila,&quot; he said.&quot;We&#x27;re talking of compliance with government standards. So bakit hindi niyo ginagawa? Kasi kung doon palang sa level ninyo nagse-self regulate na kayo, hindi na tayo magkaproblema ngayon,&quot; he noted.&quot;They generate revenues, they generate sales and obviously profits. But they are not giving it back to the government in the form of taxes. Ang sinasabi mo, they are only taxed when the products enter. When it comes to income tax, they are not paying. Why are you allowing them?&quot; Biron added.Estiller said they have a so-called whitelisting mechanism on regulated products.The local manufacturers pointed out that there are merchants selling rice cookers, air cleaners and other items that supposedly come from a big brand, but turn out to be fake since the major company does not carry them.Yao said they cannot compete with these offshore merchants because the prices of the items are lower than their acquisition costs.&quot;Part of the problem nasa inyo. Once you self-regulate and you self-police, half of the problem will be solved. Doon na agad kami sa Customs hulihin na namin yung smugglers. Preventing them from selling on your platforms will solve half the problem kasi wala na silang outlet eh,&quot; Biron said.&quot;If you don’t allow these merchants to sell unregistered merchandise, half of the problem is solved,&quot; he added.Estiller reiterated that they self-police and close down stores, but they are working on improving their policies and sweeping their platform.For its part, ByteDance PH says TikTok also requires its sellers to comply with Philippine regulations and requirements.&quot;We do require our sellers to indicate on the product listings the requisite permit numbers for their products so the sellers know. We also conduct proactive measures to ensure our platform remains a safe space. We also partner with the regulators,&quot; <span id="isPasted" style="color:rgb(65, 65, 65);letter-spacing:normal;orphans:2;text-align:left;text-indent:0px;text-transform:none;widows:2;word-spacing:0px;-webkit-text-stroke-width:0px;white-space:normal;background-color:rgb(255, 255, 255);text-decoration-thickness:initial;text-decoration-style:initial;text-decoration-color:initial;display:inline !important;float:none">Atty. Jean Ramirez said.&quot;For <a href="https://news.abs-cbn.com/business/2024/10/9/with-2-million-sellers-tiktok-shop-already-among-top-players-in-ph-official-1539" rel="noopener noreferrer" target="_blank">Tiktok Shop</a>, we contractually obligate our sellers to comply with local regulations regardless of where they came from,&quot; she added.<div><a href="https://news.abs-cbn.com/business/2024/11/12/livestreaming-is-changing-e-commerce-industry-player-1630" rel="noopener noreferrer" target="_blank">Livestreaming is changing e-commerce: industry player</a></div>However, local manufacturers pointed out that some of the requirements being submitted like PS license certificate numbers are fake or copied from legitimate sellers.Tulfo said suppliers of online merchants buy unbranded products and place the brands once they arrive at warehouses. He lauded the BOC for its inspections and raids of warehouses with allegedly smuggled electronics.Lawmakers also criticized e-commerce platforms for not validating the authenticity of the documents and requirements submitted by online sellers, citing a lack of expertise.&quot;Every platform should ascertain [the documents]. Aside from having a business permit, I&#x27;m restricted in where I can sell. I am also restricted on what I can sell. There has to be accountability,&quot; Rep. Angelica Garcia said.The National Economic Development Authority (NEDA) acknowledged there is a need to revisit existing laws on the selling of goods through online platforms, especially taxation.Lawmakers said they will write a formal letter to once again invite representatives from major e-commerce platform Shopee to the next hearing.<div><a href="https://news.abs-cbn.com/business/2024/2/5/fake-goods-ban-in-place-shopee-says-after-us-flagging-1647" rel="noopener noreferrer" target="_blank">Fake goods ban in place, Shopee says after US flagging</a></div>They also required the e-commerce platforms to submit a list of unregistered products that they have taken down without registration or permits from DTI.&quot;Sa ngayon we expect voluntary compliance from Lazada, TikTok, Shopee and ano mang platforms used for e-commerce. We expect them to voluntarily comply and take down these unlicensed, unregistered merchants flooding the e-commerce platforms,&quot; Rep. Biron said.The DTI was also asked to improve its website on registered brands and products to better inform consumers to steer clear of these merchants.

About 300,000 employees of local manufacturers of small appliances are at risk of losing their jobs due to supposed unfair online sales practices, according to a lawmaker.

About 300,000 employees of local manufacturers of small appliances are at risk of losing their jobs due to supposed unfair online sales practices, according to a lawmaker.

Local manufacturers cry for help vs unregistered appliances sold online

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Local manufacturers cry for help vs unregistered appliances sold online

Paige Javier,

ABS-CBN News

Published November 18, 2024 05:37 PM PHT

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