The government estimated that the country’s exports of strategic goods reached $4.5 billion in 2022 and is expected to further increase following the launch of the Strategic Trade Management Office (STMO) e-Licensing Platform.
At the official launch Monday, Feb. 9 of the STMO e-Licensing Platform Trade and Industry Secretary Alfredo E. Pascual cited the role of this online platform, which monitors, controls and ensures that trade in the specified strategic goods are safe and secure from weapons of mass destruction (WMD). The launch was attended by representatives from the United States Defense Threat Reduction Agency (US DTRA), top government officials and technology partners.
Since the STMO started implementing and accepting export authorization applications in 2020 up to the end of that year, Pascual said the country’s export value for strategic goods amounted to $3.6 million. The following year, 2021, saw a big jump when traded strategic goods were valued at $4.5 billion.
“The STMO has yet to verify the specific amount for last year, 2022, but it is estimated to be around the same $4.5 billion figure,” said Pascual as the Bureau of Customs is still validating the annual reports and reconciling the data.
Of total strategic goods exports in 2021, information systems formed 98 percent of these exports, while semiconductors and integrated circuits accounted for the remaining two percent. Also, there were $650,000 in new investments in the intangible technology transfer.
The country’s biggest trading partner for strategic goods exports is the United States accounting for 60 percent followed by Japan at 21 percent, Singapore at five percent, South Korea at four percent, and China at three percent.
“The potential trade in strategic goods is expected to increase as businesses become more confident to expand their activities, considering the risk assessment criteria we apply to all export applications. For instance, US-headquartered companies are guaranteed that we will not allow their Philippine counterparts to have businesses with sanctioned individuals and entities,” said Pascual.
Pascual explained that the salient feature of the online platform includes a one-stop shop for all export control related services. The e-licensing platform is also accessible 24/7 to all stakeholders.
Safeguards have been placed to make transactions more efficient, transparent, and secure. Ultimately, this IT infrastructure project will facilitate the issuance of certificates to our industry stakeholders applying for the cross-border transfer of strategic goods.
DTI expects this infrastructure to help increase industry awareness and compliance with the Strategic Trade Management Act law enacted in 2015. “This will significantly increase and improve the Philippines’ implementation of our international obligations, thus demonstrating our commitment to peace and security,” said Pascual.
The official launch of the STMO eLicensing Platform is a Philippine commitment to its international obligations in pursuing peace, particularly the United Nations Security Council Resolution 1540.
Security Council Resolution 1540 seeks to address the most critical challenges to peace and security the world faces today: preventing the proliferation of WMD; controlling the spread of conventional arms; and regulating transfers of goods, software, and technologies that can be used for WMD or military purposes. Confronting these challenges effectively is critical to protecting our country’s national security, foreign policy, international commitments, and most importantly, our people, our environment, and our allies.
WMDs are weapons that can cause widespread damage to human and animal life, infrastructure, and the environment; they also evoke terror in a population. They can be nuclear and radiological, biological, or chemical.
For its part, the Philippines created our National Security Council’s Strategic Trade Management Committee (NSC-STMC) as the central authority on any and all matters relating to strategic trade management.
By virtue of Republic Act No. 10697 or the Strategic Trade Management Act of 2015, the National Security Council - Strategic Trade Management Committee (NSC-STMCom) was established.
The Committee is mandated to manage the trade of strategic goods and prevent the proliferation
of weapons of mass destruction and their means of delivery. Further, the Committee is tasked to maintain international peace and security and promote economic growth by facilitating international trade through the responsible management of strategic goods and the provision of related services.
The body is headed by the Executive Secretary as its chairperson and the Trade and Industry Secretary—yours truly—as its vicechairperson. Its pivotal role necessitates the membership of the Secretaries of Foreign Affairs, Justice, Environment and Natural Resources, Interior and Local Government, Finance, Transportation, Information and Communications Technology, Science and Technology, National Defense, Agriculture, Health, and the National Security Council.
Through the STMO, the Philippine government works to harmonize our strategic trade rules with our partners and allies.
The DTI-STMO was granted IT infrastructure support from the United States Defense Threat Reduction Agency through the Cooperative Threat Reduction Agreement (CTRA) between the United States and the Philippines.
Likewise, the e-Licensing Platform forms part of the Marcos Administration's current policy thrust to digitalize all government transactions, thereby eliminating red tape, promoting ease of doing business, and preventing corruption. Furthermore, the platform provides easy and secure access, retrieval, and sharing of data and information for STMO and partner government agencies (GAs).
"It is expected that with this infrastructure, the awareness and compliance of industries with the STMA will significantly increase, which, in turn, will improve the Philippines' implementation of its international obligations," said Pascual.
“We aim to balance facilitating legitimate trade and maintaining international peace and security, and we want to trade in tools while ensuring that these tools are not used as weapons. The STMO e-Licensing Platform is a way forward in responsibly managing strategic goods and providing related services,” he said.
In the relatively short time since STMO was established in 2017, Pascual said, the Philippines improved its ranking on the Peddling Peril Index from 86th to 49th place in 2021/2022. The Peddling Peril Index is the first comprehensive and in-depth ranking of the effectiveness of strategic export controls by country.
“In this marker, our country was also considered the most improved country for the same period. Moreover, we continue to gain the trust of our stakeholders with a 100% satisfaction rating in 2022,” he said.