PARAÑAQUE CITY Philippines —Among purchases in a suitcase that will return to the U.S. from the Philippines in March is a DVD of a recent boxing match.

The suitcase belongs to a retired officer of the U.S. Navy who wishes to remain anonymous. He told the Journal he is on a month-long visit from Seattle where he has resided for more than 30 years.

When he returns home packed carefully in his luggage will be a DVD of the recent boxing rematch between Filipino Manny Pacquiao and Mexican Erik Morales which the former won.

“My friends told me I could buy it easily here ” he said. The retired Naval officer’s niece — who lives in Parañaque — had no trouble finding the prized DVD. In a small night bazaar here in Parañaque laid out on several stalls along with the Manny Pacquiao DVD are boxed seasons of “Lost ” “24 ” “The Sopranos ” as well as copies of Oscar nominated films still to be shown in Metro Manila’s theaters.

“I come here every weekend just to check out the latest DVDs ” the niece said while taking the Journal on a tour of the bazaar. “I’ve already watched “Brokeback Mountain” and “Transamerica.” Tomorrow I’ll watch “Capote ”” she said. All of them she said are “DVD copies.” Nevertheless there are still customers who buy the copies when they are in a hurry to watch the latest Hollywood releases vendors at the night bazaar said.

Boxed sets of any popular American TV series spanning five to seven seasons cost about $35 compared to an original set of just one season which sells for the same price. Pirated discs of films meanwhile sell for $1.25 each compared to the original which sells close to $10 each.

Despite the continued proliferation of pirated DVDs in the Philippine market the office of the U.S. Trade Representative on Feb. 15 removed the Philippines from its Special 301 Priority Watch List of intellectual property rights violators. It is now only on the Ordinary Watch List.

In a press statement the USTR said the decision resulted from an “Out of Cycle” Review on the Philippines which concluded that “Throughout 2005 the Philippines bolstered implementation of its special legislation that was passed to stop illegal production of pirated optical discs such as CDs and DVDs by controlling the licensing of and conducting raids against pirate optical disc production facilities. In addition Philippine authorities conducted numerous raids on retail stores selling pirated and counterfeit goods. The Philippine government also measurably improved coordination of government agencies responsible for IPR enforcement.

“However the OCR also concluded that sustained effort and continued progress on key IPR issues will be essential to avoid a future return to the Priority Watch List. The U.S. will be monitoring closely efforts by the Philippines government to further improve its IPR enforcement regime.”

Ironically the announcement was made as revelations came to light in national media of deals apparently forged by the Optical Media Board — a government agency tasked to fight video piracy — with local DVD pirates not to sell films exhibited during December’s Metro Manila Film Fest.

Edu Manzano head of the OMB and a TV/film actor and TV host has admitted that he had talked with the DVD pirates but did not answer allegations by film producers and actors that the pirates were paid off.

Adrian Cristobal Jr. director general of the Intellectual Property Office declined to comment on the OMB deals when asked by the Journal.

Nevertheless he welcomed the decision of the USTR to remove the Philippines from the PWL thus enabling the country to escape possible trade sanctions.

“We take this as a fair evaluation on the merits and a clear recognition that the Philippines is determined to eradicate piracy and counterfeiting in the country ” Cristobal said.

He said remaining on the PWL would have put the Philippines “a step away” from losing its duty-free privileges for certain exports under the U.S. Generalized System of Preferences program. The last category of extreme IPR violators is the Priority Country List where trade sanctions are meted out.

“The Philippines exports duty free close to $1 billion to the U.S. annually under the GSP program. In 2004 our exports represented 55.6% of total Philippine exports to the U.S. ” he said.

Remaining on the PWL would have imperiled Philippine exports such as electronics and electrical devices; food and agricultural products (raw and processed); furniture handicrafts and wood products jewelry and others Cristobal said.

The USTR decision comes at a time when the Philippines is still riding high on recent credit rating upgrades from international rating agencies and a decision by the biggest pension fund in the U.S. to keep the Philippines on its investment list.

“Our removal from the PWL also bolsters our international reputation as an investment destination of choice in Asia and greatly enhances the government’s investment promotion strategy especially for the Information Communications Technology Sector the copyright related industries (such as software development and animation industries) and the patent related industries (pharmaceutical technological and the design industry–furniture jewelry garments manufacturing) and the trademarks of businesses especially (small and medium enterprises) which constitute over 90% of businesses in the country ” Cristobal said.

Meanwhile reported deals between OMB and video pirates may still be in force as the Journal couldn’t find any of the films from the Metro Manila film fest at the Parañaque night bazaar.

Manzano had only this to say of alleged deals forged with the DVD pirates: “I think we were just a bit more creative this time. We went back to the old dialogue. We really went deep inside [their network].”

Film producers alleged that the OMB had approached them to ask for additional funds to stop DVD piracy. “It was like paying ransom for our own movies ” Roselle Monteverde-Teo of Regal Entertainment said. The Film Academy of the Philippines also claimed that the DVD pirates were asking for 200 000 pesos ($3 846) in exchange for not distributing pirated versions of the MMFF films while they were still being shown.

Asked why there seemed to be more pirated DVDs around and in a larger number of stores Cristobal said government efforts continue to be hampered by inadequate funds and manpower.

“Compared to the funds spent by these pirates and their well-entrenched retail network admittedly we are at a disadvantage ” he said. “But having said that I believe the USTR recognized that despite some handicaps we have been able to increase arrests and seizures. In due time we will have the upper hand.”

Cristobal said the USTR saw a more focused and strategic enforcement plan. “Raids were sustained in notorious retail outlets (Quiapo Binondo Makati Cinema Square) and there was more emphasis in raiding wholesalers and production centers.”

He said in 2005 the OMB and the Philippines Bureau of Customs seized 13 replicating machines. The BOC also seized about 300 million pesos ($5.8 million) worth of fake products. There were also five convictions in Philippine courts in 2005.

Cristobal said there is a need to strengthen BOC’s border controls. “More than 85% of fake items including DVDs in the market come from abroad.” Many of the fake DVDs come from Malaysia and China and are brought in by a Malaysian-Chinese syndicate that also sells them in other Southeast Asian countries. He said there is also a need for “more aggressive IP prosecution that result in convictions.” These measures have to be taken to enable the Philippines to be permanently removed from the Ordinary Watch List.

Before the Journal parted ways with the Naval officer’s neice she was carrying a fistful of pirated DVDs and CDs. Her latest finds included U2’s “How to Dismantle an Atomic Bomb ” Hed Kandi’s “Nu Cool ” and film classics like Sergei Eisenstein “Battleship Potemkin ” Michael Curtiz’s “Casablanca ” Akira Kurosawa’s “Rashomon ” the Eden Concert of Sarah Brightman and Rod Stewart at the Royal Albert Hall.

“My suki (long-standing vendor) promised new titles next week … maybe she’ll have “Memoirs of a Geisha ” “Munich ” and “Syriana ”” she said. MBJ