‘Blessing’ for the forest

IN an apparent bid to augment the dwindling local wood supply and meet the increasing demand for this economically important commodity, the Department of Environment and Natural Resources (DENR) is pinning its hopes on imported wood.

To streamline the process of importing wood and other wood products, Secretary Roy A. Cimatu of the Department of Environment and Natural Resources (DENR) has issued new guidelines or policies regulating the entry and disposition of imported wood and timber products in the Philippines.

DENR Administrative Order 2021-06, or the Revised Regulations Governing the Entry and Disposition of Imported Wood Products signed by Cimatu on April 21, 2021, prescribes  new guidelines that, among others, aim to “rationalize” the requirements and procedures of the commodity into the country.

It effectively replaces all DENR policies on wood importation under DAO 99-46.

‘Stop-gap’ measure

SPECIFICALLY, DAO 2021-06 aims to allow the importation of wood materials as a stop-gap measure to ensure a continuous supply of wood raw materials until such time that local supply from tree plantations can adequately meet local needs.

It also aims to augment local sources in order to utilize existing wood processing plant capacities and enable wood-based industries, including the furniture and other downstream wood industries, to generate employment and income.

During the 2019 Wood Summit, the DENR’s Forest Management Bureau (FMB) estimates that the Philippines requires 6 million cubic meters of wood annually based on the average consumption of wood from 2006 to 2014.

The demand for wood is projected to increase in the ensuing years. Of the national demand for wood, only 25 percent comes from local sources, while a hefty 75 percent is imported, according to the FMB.

Under the new guidelines, imported wood products now have corresponding tariff codes or Asean Harmonized Tariff Nomenclature or AHTN, a tariff code that classifies commodities being imported and exported.

The Philippines, both as an exporter and importer of wood and wood products, is becoming heavily dependent on imported wood because of its poor capacity to produce wood and wood products locally under existing forest policies.

This is mainly attributed to the country’s shrinking forest cover due to legal and illegal logging activities.

Biodiversity loss

BETWEEN 1990 and 2005, the Philippines had lost 32.3 percent of its forest cover or around 3.4 million hectares equivalent to about 262,500 hectares of forest lost every year during the period, according to urban planner Argean Guiaya, highlighting the serious threats to the country’s rich biodiversity during a lecture on May 21 as part of an online event in celebration of the International Day of Biological Diversity 2021.

Due to the unmet local demand in recent years, import volume has far outweighed the supply capacity of local wood producers.

Compounding the huge supply demand gap was the imposition of the total log ban policy by the past Aquino administration to allow the country’s forest to recover.

EO 23, signed on February 1, 2011, imposed a total log ban on natural and residual forests.

However, despite the all-out campaign against illegal logging activities, harvesting of wood even in so-called protected areas persists with illegal loggers targeting “good lumber” for the supply of the construction as well as furniture industry.

In Northern Luzon, for instance, the DENR’s Regional Offices there have come together to strengthen the campaign against illegal logging activities, starting with jointly conducting inter-provincial and regional checkpoints.

The Northern Luzon is still considered an illegal logging hot spot due to the rampant timber poaching in its forestlands.

Who may import and from where?

THE increasing demand for wood and the poor capacity of local wood producers have resulted in skyrocketing prices of wood products.  Allowing the entry of imported wood and wood products is also meant to bring down the price of the valuable commodity.

Under the new guidelines, a holder of tenure instrument, Wood Processing Plant Permit or Certificate of Registration (COR) as Wood Furniture Manufacturer, Agent Contractor, Agent, Contractor or Dealer of logs/poles and Piles/Lumber issued by the DENR may import wood materials.

However, before availing of the privilege to import, the holder of tenure and or Wood Processing Plant (WPP) Permit shall have his or her current logs, commercial Poles and Piles and/or Lumber Dealer’s Permit stamped by the Office of the Regional Executive Director of the DENR as a valid authority to imported wood materials.

The new guidelines also listed the authorized ports of entry for Luzon, the Visayas and Mindanao.

For Luzon, the authorized ports of entry are Poro Point; San Fernando, La Union; Santa Ana, Cagayan; Mariveles, Bataan; Subic Bay Port; Legazpi City; South and North Harbor Manila, and Batangas City.

For the Visayas, the ports of entry are Iloilo City, Cebu City, Bacolod City and Dumaguete City. For Mindanao, Cagayan de Oro City, Butuan City, Bislig, Surigao del Sur, Davao City, Parang Maguindanao and General Santos City have been identified as the authorized ports of entry.

Sources at the DENR-FMB said among the salient features of the revised guidelines are the “streamlined” procedures and requirements in the issuance of import authority or COR to import wood products, consistent with the Ease of Doing Business law.

“Examples of the requirements that were not included in the said DAO are certifications from Philippine Wood Producers’ Association (PWPA) and Chamber of Furniture Industries of the Philippines or CFIP; and Supply Contracts and Authentication from the country of origin,” said the source, who spoke on condition of anonymity.

The source, a forestry expert, added that the wood products being regulated are already classified/categorized based on the AHTN Code, so that the importers/clients and the relevant agencies, particularly the Bureau of Customs (BOC) and DENR Field Offices, become aware of the kind of imported wood product being regulated by the DENR.

‘Gray areas’

HOWEVER, the kind of wood products or coverage is not specified, thereby resulting in confusion between and among the DENR and BOC, on whether or not the subject wood is covered by the AHTN.

“Under the old guidelines [DAO 99-46], the kind of wood products or coverage is generic. As a result, there is confusion among the BOC and DENR Field Offices if a particular item is covered by the regulation. With the inclusion of AHTN, it will be much easier for the various agencies to determine if the items are regulated for import or not because all items for importation now have corresponding AHTN,” the source said.

DENR Assistant Secretary for Policy, Planning and Foreign Assisted and Special Projects Marcial C. Amaro Jr., the concurrent FMB director, could not be reached for comment and had not responded at press time to the BusinessMirror’s request to discuss the salient features of the new wood importation guidelines.

Self-sufficiency goal

SOUGHT for his expert opinion, Executive Director Ricardo Calderon of the Asian Forest Cooperation Organization (AFoCO) lauded the new policy.

“In my personal view, this is a very good enhancement of the previous regulation regarding importation,” Calderon, a forestry expert, said. Calderon is a former DENR assistant secretary and former director of the DENR-FMB.

Now the head of AFoCO, he observed that the objective of the guidelines is very clear and well-defined as the Philippines is still beefing up its local supply of wood.

“Per FMB records, we are still importing around 4 million cubic meters of round wood equivalent, as our local production can only provide a little less than 1 million cubic meters,” he said.

He added that the country needs to expand its forest plantation if it is to fill the supply gap and possibly reverse the trade balance in favor of exports.

“We need around 42,000 hectares of mature plantation annually in order for us to be self-sufficient [in meeting] our wood requirements for the country,” he said.

Calderon noted that in the Asian Region, the current focus is to rehabilitate and conserve primary forests and encourage private-sector investment in forest plantations in order to sustain the wood industry requirements.

“Forest plantation development should be fully supported while we protect and conserve our natural forest, including secondary forest,” Calderon said.

“The forest areas designated and legislated as protected areas and conservation areas are increasing worldwide, according to the last United Nations Forum on Forests report, which is also the current trend in the Philippines. Hence we are on track as far as these priority areas of forest management are concerned,” he concluded.

Image courtesy of Antonio Oquias | Dreamstime.com

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