The Philippines jumped 37 places, making it the most improved country in the 2021/2022 Peddling Peril Index of countries implementing strategic trade regulations, according to the Department of Trade and Industry.
The country moved up to 49th spot in 2021 from 86th place in 2020 in the PPI, which is run by the Institute for Science and International Security―a non-profit, non-partisan organization whose main goal is to prevent the spread of nuclear weapons and related technology.
PPI is a comprehensive and in-depth ranking of the effectiveness of strategic export controls by countries. Strategic goods refer to military goods and dual-use goods that may include firearms and weapons,
“PPI rates 200 nations based on their strategic trade control adoption and implementation, with the goal of assisting countries in strengthening their systems by examining the degree of their implementation and enforcement, as well as tracking their progress over time,” said Trade Secretary Ramon Lopez.
“The marked improvement in implementing strategic trade control laws is, to a large extent, due to the support extended by the Office of the President through Executive Secretary Salvador Medialdea and Deputy Executive Secretary Michael Ong for their able leadership as chair and alternate chair of the National Security Council-Strategic Trade Management Committee,” Lopez said.
Strategic goods are items with civilian and military applications, and many of these goods can be used as materials or parts of weapons of mass destruction. Various countries have enacted strategic trade control laws in compliance with their obligation in numerous treaties and international agreements to prevent the proliferation of WMDs.
The Philippines enacted Republic Act No. 10697, also known as the Strategic Trade Management Act, which established NSC-STMCom as the government’s policy-making body on strategic trade matters.
The STMA also created the Strategic Trade Management Office as the agency mandated to register, issue or deny authorizations, undertake risk assessments and conduct investigations on matters pertaining to the cross border trade in strategic goods.
Enterprises engaged in the export, reexport, reassignment, transit, transshipment and import of strategic goods as well as related services such as brokering, transporting financing and providing technical assistance are subject to the regulatory requirements of the STMA.
Five super criteria and 105 sub-criteria or indicators make up the PPI. These are international commitment to preventing strategic commodity trafficking; legislation to regulate and oversee strategic commodity trade; ability to monitor and detect strategic trade; ability to prevent proliferation financing; and effectiveness of enforcement against strategic commodity trafficking.
The Philippines achieved more than 50 percent of the total possible points in four super criteria: 87 percent, or 174 out of 200, in legislation; 71 percent or 282 out of 400 in adequacy of enforcement; 65 percent or 129 out of 200 in ability to monitor and detect strategic trade; and 58 percent or 58 out of 100 in international commitment.
While it achieved only 28 percent of its capacity to prevent proliferation financing, this was also the criterion with the highest increase in score. This can be attributed to STMO’s issuance of guidelines to comply with the requirements of the Financial Action Task Force on the Implementation of Financing and Brokering.
The Anti-Money Laundering Council also issued targeted financial sanctions related to proliferation of WMD and proliferation financing, that took effect on Feb. 1, 2021.
Trade Undersecretary Ceferino Rodolfo thanked Congress for passing one of the world’s most comprehensive strategic trade control legislation as this enabled the country to adopt a whole-of-government approach to ensur that strategic goods trade is used for legitimate purposes only and not diverted to WMD proliferators.
“The Philippines’ strong improvement in the PPI ranking is likely to boost the country’s image as a secure investment location for the manufacture and export of strategic goods,” said Rodolfo.