A big portion of the new grant was intended to open new markets in the new partners of the Philippines in the ASEAN plus six free trade partners and the rich Muslim countries in Asia and the Middle East. New Zealand, India and Australia joined the ASEAN free trade area last February. -- Abe P. Belena, PHILEXPORT News and Features <--back
2. Nuke power plant now real option in RP due to expected energy shortage
Rehabilitation and operating the Bataan nuclear power plant is now a real option in the Philippines, an international think tank group Oxford Business Group, has concluded.
This is so as industry analysts project that if no new power plants are built beginning this year, the country will run short of electric supply by 3,000 megawatts by 2012 or three years from now.
Two thousand megawatts will be the supply needed for the main island of Luzon while the Visayas and Mindanao will require 500 megawatts each.
Only three small power plants are being built in Central Visayas this year which will be connected to the grid by March next year, Oxford group observed.
The looming power crisis, the think-tank said, may have been postponed for a year with decreased demand from power-intensive electronics manufacturing, the hardest hit segment of the Philippine economy by the global trade meltdown.
If rehabilitation work starts now, the 620 megawatt Bataan plant will take three years to upgrade at a cost of about $800 million, it estimated.
Although energy Secretary Angelo Reyes had asked the International Atomic Energy Agency (IAEA) to inspect the plant, the latter has not made public any conclusion on the viability of its activation.
The original construction cost was estimated at $2.3 billion. The plant was never used in generating electricity when then President Cory Aquino mothballed it. The decision was to spawn the most debilitating power shortage in the country from 1990 to 1992.
The think-tank also saw renewed activities to search for new geothermal energy sources in the next few years to help bridge the energy supply gap.
It said the Philippines is close second only to the United States in the use of geothermal energy or natural steam from dead volcanoes in the generation of electricity. -- Abe P. Belena, PHILEXPORT News and Features <--back
3. Full privatization of Napocor plants nears; Power rates to continue upward swing
The Philippines has been facing some of the highest energy costs in the region for some time now and will see further rate hikes despite privatization.
This was one of the projections of an economic brief prepared by the international think-tank group, Oxford Business Group on the electric power situation in the Philippines.
“As it stands, the country relies heavily on outside sources of energy, which account for roughly 65% of its energy needs. However, despite slowing industrial demand for power, some industry insiders still believe the country could face a power shortage of 3000 MW by 2012,” the group said.
It recalled that severe power shortages throughout the 1990s stifled industry, forcing the government to reform its beleaguered energy sector. In order to boost electricity generation capabilities and efficiency, the privatization process began in 2001, under the Electric Power Industry Reform Act (EPIRA).
EPIRA was designed to immediately lower costs, while increasing competitiveness and efficiency. The primary catalyst for achieving these goals was the privatization and sale of the state-owned power generator, the National Power Corporation (NPC), through the state-owned holding firm Power Sector Assets & Liabilities Corporation (PSALM).
According to the PSALM president and CEO, Jose C Ibazeta, "So far, 57% of all NPC's generation assets have been sold and we anticipate achieving the 70% target set by EPIRA by the first quarter of 2010."
Commenting on the progress that has been achieved through privatization he added, "In many cases the inefficiencies that plagued NPC's power generation facilities are being corrected by the privatization process. While this may cause a slight increase in prices in the short term resulting from the additional investment into those facilities, open market forces should quickly reassume control."
Indeed, the real challenge appears finally within reach - to repeat the successful upgrade of facilities all over the country in a financially viable manner.
The most identifiable regions adequate electricity supply are Mindanao and Visayas. Cebu, the country's second-largest city located in the Visayas, is already suffering from power outages during peak hours. Three new coal-fired plants, each with a capacity of 82 MW, are set to come on-line as early as March 2010.
However, these will serve as a temporary solution as demand for power in the region and the country, continues to outpace production, the think-tank concluded. -- Abe P. Belena, PHILEXPORT News and Features <--back
4. Offer unique, new products for Europe’s high-end home decorations market, exporters told
Exporters are advised to develop unique and new kinds of products geared for the high-end home decorations market in Europe.
In a market report, PHILEXPORT Cebu market analyst Benjamin Chui noted that there are still opportunities for exporters to sell their products in European countries despite the global financial crisis.
“The middle and upper market segments, where consumers continue to seek unique and high quality products, offer the best opportunities,” he said. “The key to success lies in offering unique products and continually innovating by means of product development.”
Chui cited one Indonesian exporter as saying that his exports of home decorations to Europe are “currently rising as a direct result of product development.”
However, the analyst also recognized constraints in financing being faced by the exporters in effectively serving orders of their customers in that part of the world.
Chui said banks are reluctant to put up investment capital and export financing resulting from the global crisis, making it more difficult for businesses to access credit.
“As a result of this constraint, exporters are having a hard time obtaining pre-financing they need to produce and serve orders and unable to invest in product development and participation to trade fairs,” he noted.
“Chui said importers are looking for reliable suppliers who regularly make an appearance at trade fairs, are innovative and noticeably keyed into the European market.
Lower sales in Europe are an added burden to the exporters of home decorations and accessories and home textiles due to the impact of the financial crunch, he added.
Citing survey result conducted by the Centre for the Promotion of Imports from developing countries (CBI) in the Netherlands, Chui said export margins dwindled while unemployment rose in the sourcing countries, particularly in developing countries.
“Orders are shrinking. EU importers are selling their stocks first before placing new orders,” he said.
The analyst further said Asian and African exporters have been also affected by the crisis but to a slightly lesser extent compared to the ones most dependent on the United States markets. -- Danielle Venz, PHILEXPORT News and Features <--back
5. Clustering of exporters crucial to widening of markets – industry player
Export businesses should aggressively pursue industry clustering strategy as a way to penetrate more foreign markets especially this time of global financial crisis, according to an industry player.
Salvio Valenzuela, executive director of the Philippine Chamber of Handicraft Industries (PCHI), said local exporters have to survive with their declining revenue pie of the shrinking total imports pie of the United States.
“But even if our foreign buyers do not have much buying power, they will still continue to buy because there is still demand in their countries or in the markets we target. Admittedly, sales have declined,” he noted.
However, Valenzuela said lack of capital hinders exporters to meet their orders abroad.
“He said this financing problem can be addressed by adopting clustering of exporters and even subcontractors in the same product line. “This is the right opportunity for us to cluster ourselves,” he said, adding
“This strategy could reduce operational costs and widen our markets. When they are clustered, an order of one exporter will also be an order of the supplier.”
Aside from the US, Valenzuela said, demand for their products in the European markets is increasing, owing to their promotional efforts geared for these countries during the past three years.
He bared that other small markets are booming, including Eastern European countries and Russia. However, Japan market remained weak, he added.
Industry clustering is one of the strategies under the export development plan meant to benefit businesses in the regions and provinces in terms of raising productivity and reducing shared manufacturing costs, among others.
Among those that were documented as model clusters were the bottled sardines cluster in Dipolog, Zamboanga del Norte; the furniture industry in Cebu; the banana, coconut, wood, information technology services, seaweeds and mango clusters in Davao; the high value vegetables in Bukidnon; the processed food of Northern Mindanao; and the processed food cluster in the Caraga region. -- Danielle Venz, PHILEXPORT News and Features <--back
6. Foreign buyers opt for healthy, ready to eat food products
Consumers abroad are becoming more health-conscious as they go for organic and natural products and those with lesser calories.
Their hectic-paced lifestyle also increases demand for easy to prepare and ready to eat products, said Rosemarie Castillo, chief of food preparations division of the Department of Trade and Industry’s Bureau of Export Trade and Promotion, in a forum.
Castillo said “grazing” has also become a global trend which refers to coming up with smaller but satisfying and cheaper foods.
Apart from food nutrition, more consumers are concerned about food safety with the emergence of food and water borne diseases in Asia and the Pacific, she added.
“Food safety assurance has increased impact on global food trade,” she noted. “Food safety systems are essential for protecting consumers’ health, and for promoting international trade.”
Castillo said food safety scares have huge impact on trade patterns as these led to introduction of risk-based food safety systems, promotion of bio-security and food chain approach to food safety controls, and implementation of pre-requisite programs for food quality and safety.
Engr. Menandro Ortego, food specialist of the Philippine Trade Training Center, for his part, said such programs include the Hazard Analysis and Critical Control Points (HACCP) which is a systematic approach in the identification, evaluation and control of processing steps that are critical to product safety.
Ortego said sets of standard practices, criteria or guidelines to establish sanitary conditions in the manufacture of food/ingredients have been also implemented. -- Danielle Venz, PHILEXPORT News and Features <--back |
