Paper

The Philippine paper industry seeks to attain the capability to serve all major pulp and paper requirements of the country and develop high-value and quality pulp and paper products in the long-term, in a manner that is internationally competitive and environmentally-sustainable.

Its goals are:
- To improve the country’s wastepaper recovery and recycling rate;
- To upgrade the levels of manufacturing technologies and environmental performance of local paper mills;
- To establish local sources of pulp, based on sustainably-managed tree plantations and non-wood fibers from agricultural wastes and annual crops; and
- To enable the local mills in achieving economic competitiveness and thus, contribute to poverty alleviation and national development.

01

About Paper

The pulp and paper industry contributes about P30 billion per year in domestic sales value to the economy, or saves the country $700 million per year in foreign exchange from imported paper and board. As of 2012, the local paper industry directly employs about 6,000 personnel, mostly skilled workers and technical professionals, and contribute value to the economy by sustaining the livelihood opportunities of about 1.2 million workers in the wastepaper collection, sorting, and hauling sub-sectors.

Current socio-economic conditions in the country are profitable for businesses in the pulp and paper industry. While paper and paperboard consumption in the Philippines is still low at 19 kg per capita, total annual demand is growing at 2.5% per year, with packaging and tissue grades experiencing high growth rates. Moreover, total paper and board demand in the Philippines is projected to surpass 2 million tons within five years, or an additional of 0.3 million tons per year at current consumption levels.

The country’s recent strong economic performance has pushed a steady rise in demand for packaging materials such as corrugating container boards and carton boards, which can be traced to the increasing export sales of electronics, fresh fruits, garments, handicrafts and furniture. Strong growth is also seen in the domestic market, coming from the demand for packaging processed foods, appliances and other consumer goods, as well as consumption of tissue, publishing and printing paper. This strong demand is driven by improved standards of living, higher disposable income, rise in education, tourism, and increased manufacturing activities in the Philippines.

Furthermore, the shift towards environmentally-friendly policies and lifestyles drives demand further, thereby providing promising opportunities to invest in the industry. For instance, sales of paper bags and wrappings in retail stores are expanding in large volumes for the next 3 to 5 years, as a result of new laws regulating the use of plastic and polystyrene in packaging consumer and industrial products.

At present, the Philippines has twenty-four (24) non-integrated paper mills with a total production capacity of 1.3 million tons of paper and paperboard per year, as well as four (4) abaca pulp mills exporting 25,000 tons of specialty non-wood pulp per year. Major grades of manufactured papers in the country are mostly derived from recycled wastepaper, and these products come in the form of newsprint, printing and writing paper, tissue, container board, and other packaging paper and boards.

In the last five years, almost all grades produced in the Philippines have a recycled fiber content of 95-100%, compared to the minimum recycled content of 25-35% implemented in developed countries. By being a market of about 1 million tons of wastepaper per year, the paper industry provides strong support to the country’s solid waste management efforts. Consequently, it provides thousands of indirect jobs for garbage collectors, junk recyclers, sorters, haulers, and other workers in the country’s marginalized sectors.

Aside from recycling paper for its fiber requirements, the Philippines has unutilized volumes of agricultural waste and abaca (Manila hemp) that farmers in Bicol, the Visayas, and Mindanao can supply to the paper industry. Other fibers from agricultural waste (such as rice straw, banana and sugarcane bagasse), as well as plants like kenaf and bamboo, can be supplemental sources of pulp in the industry. Such production technique facilitates not only environmental sustainability and resourcefulness, but also inclusiveness in generating jobs for marginalized sectors.

Finally, the Philippines has suitable areas for fast-growing and sustainably-managed commercial forests. For instance, in the eastern half of Mindanao, pulp production can be established based on privately-owned tree farms, industrial tree plantations, and community-based forestry. The forest products sector has also identified various species excellent for reforestation, such as Acacia mangium, Eucalyptus spp hybrids, Gmelina arborea, and Albizzia falcata. Virgin kraft and chemi-mechanical pulps (used in high-grade and international standards-compliant paper and paperboard products) can be locally manufactured from these wood species.

Since there is sufficient domestic market paper production in the Philippines, the country’s pulp requirements are enough to support the establishment of an economic-sized pulp mill. The industry presently operates without the presence of a local pulp mill, which is necessary for the production of specialty and high-value paper products. Domestic and foreign investments on this significant component will make the paper and pulp supply chain more productive and cost-competitive.

02

Facts and Figures

Volume of Paper and Paperboard (‘000 MT)

2006 2007 2008 2009 2010 2011
Exports 176 168 135 132 165 130
Imports 620 419 339 326 400 823

 

Value of Paper and Paperboard (in M US$)

2006 2007 2008 2009 2010 2011
Exports 105.9 102.2 110.1 98.8 132.1 144.2
Imports 386 291 252 223 284 737

 

Paper and Paperboard Production and Consumption (in ‘000 MT)

2006 2007 2008 2009 2010 2011
Production 524 1097 843 1019 1038 950
Consumption 968 1348 1468 1253 1834 1643

03

Policies

IPP 2014-2016

The production of virgin paper pulp integrated with forest plantation, research & development, and technical vocational education and training institutions is among the preferred activities listed in the IPP.

In the upstream: industrial tree plantation (also known as Industrial Forest Plantation (IFP) based on DENR AO 1999-53) is among the special laws listed in the IPP. This covers extensive plantation of forest land of tree crops (including timber and non-timber species such as rubber, bamboo, rattan, etc., except fruit trees) for commercial and industrial purposes.

In cases of tree plantations that are joint venture agreements with other private entities, community organizations or government entities, only the share of the registered enterprise may be entitled to ITH.

Application for registration must be accompanied by an endorsement from the DENR.

In the downstream: the publication or printing of books is among the special laws listed in the IPP. This covers content development intended for books and publication of books in print or digital format.

The following may qualify as new:

  • New book titles (original works, and original text with annotations), and
  • First format by which the new book title will be produced or published. The succeeding format (example; print to digital, or vice versa) by which the same title is published will be regarded as “Expansion.”

Re-prints, revisions, and succeeding editions of existing titles will not qualify for registration.

For unpublished content, application for registration may be on a per book title or a maximum of five (5) book titles per application.

For publishing, the following will apply:

  • A minimum of 10 titles with 1,000 copies each for its first print run, in case of printed books; and
  • A minimum of 10 titles each, in case of e-books.

Application for registration must be accompanied by an endorsement from the National Book Development Board (NBDB).

 

BPS Product Certification Scheme

The certification of pulp and paper products is guided by the Philippine Standard (PS) Quality and/or Safety Certification Mark Scheme.

PNS for Pulp and Paper Products

There are Philippine National Standards covering paper, board, and pulps, paper products, as well as tissue paper and tissue products.

04

Programs

Industry Development Program

The pulp and paper industry, through the Philippine Paper Manufacturers Association, Inc. (PPMAI), collaborates with DTI and other government agencies in order to promote the sector’s competitiveness.

Among the matters discussed in the industry Technical Working Group (TWG) include:

  • Safeguard Measures. Discussions with DTI bureaus (BETP, BITR, BPS and BIS) and the Tariff Commission regarding the formulation of safeguard measures against importation of some paper grades (e.g., newsprint and paper boards) were done to come up with adjustment plans to effectively face import competition. The Tariff Commission currently investigates the import of newsprint.
  • DTI’s Green Procurement Program. As one of the identified pilot products under the Program, the paper industry would receive capacity building assistance in order to better participate in the government’s bidding process. Currently, DTI is conducting training for technical capability to formulate technical specifications for paper products that the government purchases.
  • Investments in New Paper Mills. A possible project is the reactivation of the integrated paper mill of PICOP in Bislig that was closed in 2010. Unfortunately, the current owner has not yet responded to requests for a meeting and the interested Japanese investors are requesting for alternative sites.
  • Greening Manufacturing. Paper is one of the selected sectors included in this project of DTI with GIZ, with the aim of incorporating green elements in their production process and meet global standards.

05

Champions

Philippine Paper Manufacturers Association, Inc. (PPMAI)

Mr. Ray Geganto
Executive Director

2F FMF Bus. Center, 126 Pioneer St., Mandaluyong City

Tel. Nos.: (632) 7039124; (632) 4054069; (63) 9168200702

Fax.   : (632) 8159460

E-mail: philippinepaper@gmail.com

Board of Investments

Mr. Mario Pocholo Orense
Sectoral Champion

Industry and Investments Building,

385 Senator Gil Puyat Ave,

Makati City Philippines

Tel. No.: (632) 895-3977

Email: MPMOrense@boi.gov.ph