Certification remains key hurdle to halal dev’t

MUSLIMS in the Philippines, among the first traders and migrants in the country but now a minority, struggle to observe Islam’s halal principles when they travel to this day.

“For example, there are only a few establishments that have bidets in their comfort rooms,” said Marilou W. Ampuan, one of the prime movers of the fledgling halal industry in Mindanao, which has the country’s biggest concentration of Muslims, as she stresses the point that halal — contrary to common understanding among non-Muslims — is not simply about food.

“It is an entire way of life for someone who believes in Islam,” she said in a recent interview.

Ms. Ampuan, president of Philippine Halal Trade and Tourism and one of the founders of the Mindanao Islamic Chamber of Commerce and Industry (MICCI), said information dissemination is still one major step that needs to be taken if the Philippines were to grab a slice of the global halal market, beginning with the local Muslim population of about 11 million.

The global halal market is estimated to be worth $3.2 trillion and is projected to grow to as much as $10 trillion by 2030, according to the Department of Trade and Industry (DTI).

For halal tourism, a study released in January 2016 by Thomson Reuters in collaboration with strategy and research advisory firm Dinar Standard, estimated that the Muslim sector accounts for 11.6% of global tourism expenditure, not including spending related to the annual Hajj and Umrah pilgrimages. The study projected that the halal tourism market could be worth $238 billion by 2019.

Halal is not just a religious matter, Ms. Ampuan explains, but a preferred way of manufacturing goods and deliver services in order to ensure safety and quality, hence, the requirement for halal certification.

“The lack of (clearly authorized) certifiers is still a major concern for our halal industry,” she said.

There has been some headway in recent months. But in the past, the Philippines did not have a government agency or one accredited private entity for certification — leaving the halal sector with an “integrity problem,” as described in 2014 by Potre D. Dirampatan Diampuan, chief executive officer of the halal advocacy group Alliance for Halal Integrity in the Philippines, Inc.

The establishment of the National Commission on Muslim Filipinos ( NCMF) in 2010, which was given authority to accredit local certifying agencies, was unsuccessful in resolving the integrity issue.

At some point, there were as many as 18 agencies claiming halal certification authority.

Ms. Ampuan said some of these agencies and business enterprises have “defamed” halal, the Arabic word for permissible, by giving or using labels without going through the required checking of standards.

LEAD AGENCIES

Now with Republic Act (RA) No. 10817, or the Philippine Halal Export Development and Promotion Act of 2016, the Philippine government intends to address that.

Among other things, the law designated DTI as head of the Philippine Halal Export Development and Promotion Board, which includes the NCMF; the departments of Agriculture, Health, Foreign Affairs, Tourism as well as of Science and Technology; the Bangko Sentral ng Pilipinas, Mindanao Development Authority (MinDA) and two Muslim Filipino professionals.

“We have clarified on the certification,” Senator Cynthia A. Villar, chairman of the Senate Committee on Agriculture, said in a speech at the Davao Agri Trade Expo 2017 last month.

“If certification (is) doubtful, products will be rejected in the international market.”

The DTI-led Halal Board adopted last May RA 10817’s implementing rules and regulations but has yet to issue national certification guidelines.

“As the implementing rules and regulations are now in place, DTI will beef up development and promotional activities for the Philippine halal sector which will open new economic opportunities, particularly in Mindanao,” Trade and Industry Secretary Ramon M. Lopez, who chairs the halal board, had said in August.

Earlier this month, officials of the Philippine Trade Training Center met with those of the Islamic Da’wah Council of the Philippines — one of the internationally recognized Islamic organizations in the country — and with University of the Philippines Institute of Islamic Studies Dean Macrina Morados to discuss a Certification Program Training on Halal Assurance System, with emphasis on prioritizing “halal integrity” among micro, small and medium-scale enterprises, according to the DTI.

Vicente T. Lao, chairman of the Mindanao Business Council, said government-private sector collaboration should be strengthened to help local businesses penetrate the international halal market.

“We need a stronger cooperation among stakeholders to make this a reality,” said Mr. Lao, speaking from experience as a businessman involved in poultry production.

He recalled that in the early 2000s, a halal poultry venture was initiated involving stakeholders within the Brunei- Indonesia- Malaysia- PhilippinesEast ASEAN Growth Area (BIMP-EAGA).

Under that plan, Mindanao was to be the poultry supplier given the country’s bird flu-free status; Indonesia would be the source for feeds considering that corn, the main feed component, is cheapest there; Malaysia would serve as processing hub; and Brunei would handle halal certification and accreditation.

However, the plan was shot down by the Philippine government, whose agricultural experts argued that bringing in corn from Indonesia could expose the poultry industry to the bird flu virus. This was debunked by private sector experts but the BIMPEAGA project never came to fruition.

Arturo M. Milan, trustee at the Davao City Chamber of Commerce and Industry, Inc., said economic integration of the Association of Southeast Asian Nations ( ASEAN) that officially commenced in December 2015 should give the country renewed incentive to give attention to the halal industry, in terms of both manufacturing and tourism.

“If we can lure investors ( especially from elsewhere in ASEAN) to come and invest here, as well as Muslim tourists to consider us as their destination, it would be better for our economy,” said Mr. Milan, noting evident interest in the halal industry during informal discussions among participants of the Davao Investment Conference last July.

International Halal Accreditation Forum Secretary General Mohammed Saleh Badri said the Philippines, in fact, need not look far to get investors and a market with BIMP-EAGA.

“The Philippines has the infrastructure and condition that can provide an environment that can compete… it has a huge opportunity if it comes up with halal- certified products,” Mr. Badri said during the opening of the 2nd Philippine Halal Trade and Tourism Expo in Davao City in May.

TOURISM

Davao City has been positioning to become a halal center in Mindanao, especially for tourism, and the local government formed in April its own Halal Industry Development Council with the mayor as chairman and the president of the MICCI as co-chair.

Mayor Sara Duterte- Carpio said the council, while awaiting developments at the national level, is pushing to prepare more halal-certified establishments in the city, which has direct international flights.

Singapore Airline’s regional carrier Silk Air and the Philippines’ Cebu Pacific Air serve the Davao- Singapore route while AirAsia Philippines is opening Davao-Kuala Lumpur flights by December 2017.

“For the KL and Singapore tourists, we are diligently working on the halal food industry in our city, ( but) we have faced the challenge of getting the national standard guidelines for halal operations to be implemented by the city government,” Ms. DuterteCarpio told BusinessWorld.

City Tourism Officer Regina D. Tecson, who is part of the council, said: “We are part of the ASEAN and the BIMP-EAGA and these neighboring countries have Muslim citizens also; so, if we have a halal council and establishments that are halal-certified it will be easier for us to cater to their needs.”

Department of Tourism Davao Region Director Roberto P. Alabado III said President Rodrigo R. Duterte’s visit earlier this year to the Middle East triggered interest in halal opportunities. “If we have connectivity to Dubai and Saudi Arabia, then we can have a good strategy to market the Philippines and introduce it as a halal-friendly destination,” Mr. Alabado said.

Past assessments on the Middle East tourist market, he added, showed citizens there are not keen on coming to the country for fear of going hungry due to a lack of halal-certified restaurants.

EXPORT

For exporting consumer goods, there are areas in Mindanao being considered for development as halal centers.

Early this year, the Polloc Freeport and Ecozone (PFEZ) in Parang, Maguindanao was declared as a “halal hub” by Autonomous Region in Muslim Mindanao Governor Mujiv S. Hataman. The PFEZ, Mr. Hataman said, would be the first “truly halal economic zone in the country” and could become the “gateway” to the international market.

Further west, the Zamboanga Economic Freeport Zone ( Zamboecozone) in Zamboanga City, located about 450 kilometers from PFEZ, is also being developed as a halal hub.

A 100- hectare area in Zamboecozone’s second industrial park has been designated an Asian Halal Center that will host manufacturing and processing facilities. Groundbreaking for the Asian Halal Center took place in October 2016, and Zamboanga City’s first congressional district office has so far poured in P125 million for a road leading to the site.

“We should follow the stream of opportunity as the rest of the ASEAN is capturing the area of halal,” said DTI Undersecretary Nora K. Terrado during the Zamboanga City launch of the DTI Slingshot, a program for start-ups and innovators, in early October.

Senen M. Perlada, director of DTI’s Export Marketing Bureau, said in the same event that the Philippines is basically a “start-up nation” in the global halal economy. “This is to awaken the interest of the Philippines, not just in Zamboanga Peninsula, but also in global opportunities that are present in halal,” Mr. Perlada said.

Ms. Terrado, meanwhile, said while the halal industry in the country is “very young,” there are ways to speed up development. “We need to focus on geographies, like Zamboanga Peninsula as the possible area to begin with,” she said.

DTI Zamboanga Regional Director Sitti Amina M. Jain, in an interview, said the government is also preparing for the road map that could also encourage non-Muslim enterprises to form part of the halal sector.

“In Zamboanga Peninsula, 99% of the food processors are non-Muslims and we are encouraging everybody to seek halal certification,” she said. — reports from