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DTI seeks halal cooperation with Indonesia

09 September 2019

Published also in Business Mirror

Posterity photo of the delegations of the Philippines headed by Trade Undersecretary Ceferino S. Rodolfo (gray suit at the center) and Indonesia headed by Ministry of Trade Director General Iman Pambagyo (batik polo at the center) after the successful conduct of the Seventh Meeting of Philippines-Indonesia Joint Working Group (JWG) of Senior Officials for the implementation of the memorandum of understanding (MOU) on trade, investments, handicrafts and shipping held on August 26 and 27, 2019, in Jakarta, Indonesia.

Jakarta—In a bid to further strengthen bilateral economic relations between the Philippine and Indonesia, the Department of Trade and Industry (DTI) is set to explore possible cooperation on the halal industry with Jakarta.

During the Seventh Meeting of Philippines-Indonesia Joint Working Group (JWG) of Senior Officials for the  implementation of the memorandum of understanding (MOU) on trade, investments, handicrafts and shipping of the two economies, held on August 25 and 26, 2019, the Philippines’s DTI signified its interest to enter a Mutual Recognition Arrangement (MRA) on halal certification and accreditation.

Export Marketing Bureau Director Senen M. Perlada, who represented the Trade Promotions Group of DTI in the JWG meeting, believes that the trade imbalance between the two markets may be mitigated to a large extent by exploring possible cooperation in halal.

Philippine imports from Indonesia are mainly vehicles and motor parts, some chemicals and various animal or vegetable oils. While most of Philippines’s exports to Indonesia are electronics and tobacco and barely on food. The Philippines is hopeful to strengthen the food sector as one strategy to address this concern.

“With the new halal law in the Philippines, we are in a better position to explore cooperation in halal with Indonesia and we are optimistic that we will be able to cater to the need of the market as the Philippines’s halal industry is set to make the country a respectable player in the global halal ecosystem,” Perlada added.

Promulgated in 2016, RA 10817, otherwise known as the Philippine Halal Export Development and Promotion Act of 2016, provides a comprehensive set of objectives, targets, strategies and activities for the growth of  halal industries producing or providing products, processes and services and resulting to increased exports of  halal products.

To realize the objectives of the law, the DTI, National Commission on Muslim Filipinos, Departments of Agriculture, Health, Science and Technology, Foreign Affairs, Tourism, Bangko Sentral ng Pilipinas, and the Mindanao Development Authority, collectively known as the Philippine Halal Export Development and Promotion Board, are working very closely in the development and promotions of the Philippine halal exports.

With this law, the Philippines intends to play a significant role in the global halal ecosystem by expanding its coverage to include not only the food sector but also halal services, such as tourism, logistics and Islamic finance and increase market access starting from the neighbor Muslim-majority economies.

Meanwhile, Indonesia is known to have been conservative in terms of accepting foreign halal-certified products. The Majelis Ulama Indonesia (MUI) has since been the sole agency responsible for halal in the country and recognizes only one Philippine Halal Certification Body (HCB) with limited in scope to cover only for raw materials. This implies that only few portions of Philippine halal-certified products are allowed to enter Indonesia.

“Being able to hurdle this requirement on halal would be a great deal for the Philippines in furthering our economic ties with Indonesia,” said Jeremiah Reyes, Philippine  commercial  attaché in Indonesia.

With the new halal law of Indonesia, MUI will not be the only agency which will handle halal certification which may entail more challenges for the Philippine products. Under this new policy, all products exported, distributed and traded in Indonesia must be halal-certified. These include goods and/or services relating to food and beverages, medicines, cosmetics, chemical products, biological products, genetically engineered products, and any other products which are applied, used or utilized by Muslims.

This law will be implemented gradually starting October 17, 2019, and will be handled by the Halal Product Guarantee Agency (or Badan Penyelenggara Jaminan Produk Halal or BPJPH) under the Ministry of Religious Affairs. Any halal certificates which have been issued by MUI before this law takes effect are declared to be still effective until their period of validity expires. By October 17, 2019, the application for new halal certificate or the renewal of halal certificate will be handled by BPJPH.

The Indonesian government informed the Philippines that there are two ways to undertake the MRA. One way is through government-to-government mechanisms whereby the relevant agencies from respective countries will enter into an arrangement on such cooperation. The other way is for the private sector, in this case the local Philippine HCBs, to seek recognition directly with Indonesia. DTI prefers the former for a more comprehensive approach, while the latter is more tedious and expensive on the part of the HCBs.

With Indonesia’s openness to welcome MRA with the Philippines, it is hoped that by the end of this year, an initial draft of MRA would concretize such cooperation. A small technical group between the two countries is expected to meet in December this year to further discuss action points agreed in the seventh JWG.

Halal is an Arabic term which refers to all and any permitted, allowed or legal ways or lifestyles among Muslims.

Image Credits: PTIC-Jakarta

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