PHILEXPORT said these proposals will be in keeping with major changes in the global economy brought about by the lingering financial crisis and the increasing inflow of foreign exchange remitted by overseas Filipinos that have triggered off a strong peso despite almost zero economic growth.

These two issues have been seen by key players as seriously detrimental to most segments of the productive sector that include agriculture, domestic and export-oriented industries as well as the dollar-earning parts of the services sector. -- Abe P. Belena, PHILEXPORT News and Features <--back

2. BOI supports lifting of export permit for copper concentrates

Recognizing the inaptness of the export clearance requirement for copper concentrates, the Board of Investment (BOI) threw strong support for the abolition of the export permit for copper concentrate.

During the Philippine Exporters Confederation, Inc. (PHILEXPORT) Board of Trustees (BOT) Meeting with the Government Trustees, BOI Executive Director Lucita P. Reyes said that the export clearance requirement for copper concentrate has already been rendered inapt by the shifting market and institutional realities.

Reyes explained that the imposition of copper export permit under the Letter of Instructions (LoI) No. 1387 was aimed at providing sufficient and continuous supply of copper concentrates to the Philippine Associated Smelting and Refining Corporation (PASAR), which was a government-owned and-controlled corporation back then.

With the privatization of PASAR, Reyes noted that there is really no need for that clearance anymore. As a matter fact, a bill had been proposed before in Congress mandating the abolition of said export clearance but nothing came out of the proposed legislation.

Reyes likewise intimated that perhaps this is an opportune time to revive the bill if an Executive Order (EO) will be questioned.

As the LOI that directs the imposition of an export clearance permit was issued using the legislative powers of former President Ferdinand Marcos, said policy will have to be repealed by Congress.

Without opposition from any sector, Atty. Pascual de Guzman noted that an Executive Order will suffice, as in the case with the Banana Hectarage Limit mandated under LoI 58, which was repealed by EO 807 recently issued by President Gloria Macapagal-Arroyo.

However, the drafting of an EO repealing LoI 1387 is likely to be met with firm opposition from PASAR.

PASAR is the country's lone smelter and refinery of copper. The company is sourcing copper concentrates both locally and globally, particularly from Indonesia, Papua New Guinea, Australia, Canada, Brazil and Chile.

Hard pushed to minimize costs or die in the midst of cutthroat global competition, exporters are calling for the lifting of copper ore export permit, which has added cost to doing business and serve as an avenue for red tape.

In January 2010, exports of copper concentrates stood at USD16.1 million or 18% of total value of mineral products. This is a sharp improvement compared to USD3.1 billion in January 2009 but a dramatic fall from the December 2009 figure of USD 35.3 million. -- Ritchelle Alburo, PHILEXPORT News and Features <--back

3. Collateral-free long-term financing to smallholders urged

The country is urged to introduce an innovative approach that provides collateral-free long-term financing to smallholders whose produce can be aggregated to help exporters enter into bigger volume contracts.

This recommendation was made by Jude Esguerra, executive director of research and advocacy Institute for Popular Democracy (IPD), in a paper titled Global Transmission Mechanisms and Local Policy Responses Philippine Cases.

Esguerra said a corporative approach brings in equity capital, with the equity owners exercise discretion and formal governance authority in running the smallholdersenterprise.

Investments are made based on the specifications of the buyers with whom the smallholders contract through their organization. The latter in due time become the owners of the entity that financed their collective investments, he said.

Unlike rural banks, no collateral is required; the corporative sells the organizations produce and remits the net income to the individual farmers after making a mandatory deduction that would pay for the individualsshare capital,he explained.

Esguerra pointed out that the approach is heavily involved in constructing a bankable enterprise by being the nexus of contracts between smallholders and large buyers.

He particularly cited Mindanao agricultural production which needs to be based on or complemented by production by smallholders because of the difficulty of consolidating land needed for corporate farms.

Corporations have thus taken the next available option which is to coordinate and aggregate production by smallholders. This is the next-best thing to achieving the volume, competitive production costs, and quality demanded by export markets,he said.

The same paper raised the need for long-term contracts for small farmers to enable them to manage risks arising from price fluctuations.

Not just the government but manufacturers in urban areas can and have at times taken a critical role in transferring technology, in financing common facilities and in assuring demand for those who would venture into new products and production tasks being hived away from urban production platforms,it noted.

Esguerra cited the coordinated initiatives of Agusan del Sur local government units, the Department of Trade and Industry and business groups to address the crisis.

Post-crisis local economic development efforts must look into strengthening rural-urban supply chains so that high-quality produce can be aggregated and reliably produced by smallholders who, individually, would have very limited access to wealthier markets elsewhere,he said.

Moreover, Esguerra underscored the crucial role of income-support programs that could help finance new portfolios of crops or skills.

He said investments are needed to address risks posed by monocrop production. In very poor localities where incomes collapse in the face of outright job-losses and global price shocks, people will learn that monocrop production for foreign markets and artisanal production for micro-local markets is risky. -- Danielle Venz, PHILEXPORT News and Features <--back

4. Handicraft sectors enhance product development to achieve higher growth

Handicraft industries are aggressively implementing various product development programs intended to improve the marketability of their products both in the local and export markets.

Salvio Valenzuela Jr., executive director of the Philippine Chamber of Handicraft Industries Inc. (PCHI), bared that they are conducting product development trainings for in-house designers to make them adept on the design trends in the international market.

Every month, they have trainings not just to get trends and processes these but also really do trending so we will become trendsetter in Asia or in the whole world,he said.

Valenzuela said handicraft industry players likewise are undertaking raw materials manipulation and development as well as technology applications.

We are doing this now with abaca. We manipulate this through technologies through mixing abaca with all other materials to come up with new raw materials. We also mix raw materials which are indigenous to the Philippines to industrial materials from the Europe and other countries,he said.

Valenzuela believed that the recently launched materials library in Cebu can support this thrust.

With funding support from the Export Development Council (EDC), the materials library hosts actual material swatches (local and foreign, organic and inorganic) and reference materials on materials, material manipulation technology and development of sustainable and green products.

The PCHI exhibits raw materials from all over the region in the library, while Cebu showcases raw materials from abroad.

There would be satellite office in Manila where information would be consolidated. I think this is good for us because materials are available online so access would be easier. Exporters need not go the regions,he said, adding they can develop new materials or mix new materials with old materials by using the materials library.

Valenzuela expressed optimism that the implementation of these programs, apart from participation in international trade events, could help the industry achieve higher growth this year.

Buyers will come back provided we do our assignments in terms of prices and improving the supply chain for the next two quarters. Definitely, there will be a remarkable increase (in revenues) this year because are now doing something,he said. -- Danielle Venz, PHILEXPORT News and Features <--back