Business groups seek liberalization of wood processing

Business and advocacy groups are pushing for the approval of an administrative order from the Department of Environment and Natural Resources to liberalize wood processing in the Philippines in anticipation of renewed investments.

The groups noted that current regulations, premised on the protection of natural and residual forests, had discouraged investments in tree plantations and wood processing.

“A solution is to customize the current regulations to provide a policy environment conducive for tree plantations to thrive. We, therefore, support the Department’s proposed administrative order to promote and liberalize tree plantations,” the groups declared in a position paper.

The paper was jointly drafted by the American Chamber of Commerce of the Philippines Inc., Australian-New Zealand Chamber of Commerce of the Philippines, Canadian Chamber of Commerce of the Philippines, Employers Confederation of the Philippines European, Chamber of Commerce of the Philippines, Foundation for Economic Freedom Inc., Japanese Chamber of Commerce and Industry of the Philippines Inc., Korean Chamber of Commerce Philippines Inc., Organization of Socialized and Economic Housing Developers of the Philippines, Philippine Association of Multinational Companies Regional Headquarters Inc., Philippine Chamber of Commerce and Industry Philippine Exporters Confederation Inc., Philippine Wood Producers Association Inc., Society of Filipino Foresters Inc. and the Sustainable Tree Farmers Group of the Philippines.

Some recommended a reduction of the inventory requirement from 100 percent to zero prior to the harvest of planted trees in private lands. Inventory requirement should be maintained in forest lands prior to the harvest of planted trees based on Presidential Decree 705, or the Revised Forestry Code.

If products are to be transported outside the tree plantation area, the government should just require a certification that the products came from tenured tree plantations in forest lands and the landowner’s property in private lands.

Others want to allow private tree plantation owners and holders of tenure arrangements to establish their wood processing plants to encourage vertical integration. They want to institutionalize a training program for tree plantation certification and issue the guidelines for the recognition of third-party certifiers.

The Philippines has a growing wood demand but the current supply is unable to keep up. From 2006 to 2016, the average wood supply of the country is 5.17 million cubic meters while the wood consumption is 6.94 million m3, resulting in an average deficit of 1.77 million m3.

Promoting tree plantations can help meet the country’s local wood demand to support the government’s infrastructure projects and develop downstream wood industries, such as furniture and housing construction.

It can reduce the country’s reliance on imports and increase the contribution of the forestry sector to the gross domestic product.

With an estimated 8 million hectares of land for timber, studies show the Philippines has the capacity to produce at least 100 m3/ha of wood annually with high returns on investment.

If at least a million hectares is used for tree plantations that are sustainably managed, it could generate $1 billion or P50 billion revenues annually.

The industry can generate jobs especially in the uplands where around 25 million Filipinos reside in poverty and curb upland insurgency.

The average contribution of the sector to country’s GDP is just 0.08 percent or P4 billion from 1998-2018.

Topics: Department of Environment and Natural Resources , wood processing , forestry sector , gross domestic product , GDP
COMMENT DISCLAIMER: Reader comments posted on this Web site are not in any way endorsed by Manila Standard. Comments are views by readers who exercise their right to free expression and they do not necessarily represent or reflect the position or viewpoint of While reserving this publication’s right to delete comments that are deemed offensive, indecent or inconsistent with Manila Standard editorial standards, Manila Standard may not be held liable for any false information posted by readers in this comments section.