Welcome to Philippine Exporters Confederation, Inc.

May 21, 2010

1. Northern Mindanao exporters seek help for crippling power outages

The Northern Mindanao chapter of Philippine Exporters Confederation, Inc. (PHILEXPORT) based in Cagayan de Oro this week reported that daily power outages in Mindanao have hit an average of five hours a day and is expected to persist until the third quarter of this year.

This is one of the major issues on the table as the Chapter convenes a much needed consultationto help them sort out the situation and arrive at practical ways of solving it, said PHILEXPORT 10A president Wilson Amad.

The Cagayan de Oro group of exporters wanted to share the confederation's insights on the worsening problem of electric power shortages in Mindanao, as the El Nino induced drought in the area has brought down the capacity of hydro-electric dams to generate enough power to supply the daily needs of households and industries in the area.

In his latest statement to the news media, PHILEXPORT national president Sergio R. Ortiz-Luis had said that the issue will be best presented to the incoming President because the regular brownouts in Mindanao and frequent, rotating outages in Luzon need long-term solutions needing billions of pesos in investments.

As early as two years ago, PHILEXPORT and the Philippine Chamber of Commerce and Industry (PCCI) have been warning energy officials that by 2012 Luzon will be needing 2,000 megawatts more of generating capacity while the Visayas and Mindanao regions will be needing 1,000 megawatts each.

They had further projected that by this year, Mindanao will be needing more electricity than what existing power plants in the region and will suffer shortages while the Luzon grid will be experiencing intermittent supply shortages during the summer months.

The Department of Energy had confirmed the private sector's projections but had not acted in aggressively seeking investments which would entail billions of dollars and between three and five years of construction work.

It may be recalled that in the late 1980s, the country's economic recovery under President Cory Aquino was cancelled off by crippling power supply shortages nationwide that lasted up to 12 hours a day in Luzon by mid-1992.

No major plant has been built by the outgoing administration for the past nine years and experts project that the situation, at least in Luzon and Mindanao, is bound to get worse in the next couple of years before lasting solutions would be set in place. -- Abe P. Belena, PHILEXPORT News and Features <--back

2. RP, EU free trade pact back on the horizon

A free trade agreement (FTA) between the Philippines and the European Union (EU) is back on the horizon after the two economies managed to finally resolve one major sticking point in concluding the negotiations for the Partnership Cooperation Agreement (PCA).

In less than a month's time, the Philippines and the EU will be back on the negotiating table to seal the partnership agreement after resolving a statement over copyright protection.

The two parties are set to commence negotiations for an FTA as soon as the PCA deal is clinched.

It has been four years since the Philippines and the EU began informal talks on this partnership agreement, which is a component of the proposed comprehensive FTA between the EU and Association of Southeast Asian Nations (ASEAN).

Unlike other partnership agreements, the PCA seeks broader cooperation in both economic and non-economic areas. Other than copyright protection, human rights issues have stalled PCA talks between the Philippines and EU.

The EU has already concluded talks with Indonesia and is close to finishing its negotiations with Singapore and Thailand. The EU has also started negotiating with Vietnam and is expected to start negotiations with Malaysia and Brunei.

EU-27 is the world's largest importer, accounting for 18% of total global imports, followed by the US (17%). It is also the largest exporter, representing 16% of total world exports followed by China (12%).

The Philippines ranked 42nd among the EU's key sources of imports, far behind other ASEAN countries, excluding Cambodia and Lao PDR. Malaysia is the 17th largest supplier of EU imports followed by Thailand (18th), Singapore (20th), Indonesia (25th) and Vietnam (34th).

Bilateral trade balance is very much in favor of the Philippines, with the country's exports to Europe valued at US$8.3 billion compared to imports from the same at US$4.6 billion. -- Ritchelle Alburo, PHILEXPORT News and Features <--back

3. Continued support for export development sought

Furniture and handicraft exporters are asking the government to release the balance of the P1-billion Export Support Fund (ESF), stressing that the much-needed assistance could help boost export growth which would fuel job creation.

Salvio Valenzuela Jr., executive director of the Philippine Chamber of Handicraft Industries Inc. (PCHI), said the discontinuation of such support is untimelyconsidering that the export industry is already starting building momentum in the light of the global crisis.

Everything is moving quickly especially with government funding support. Thus, it is not good that we stop the momentum,he said. Buyers are already recognizing our pro-active marketing approach as a group and as a country.

Valenzuela said an intensified marketing campaign has provided even the small companies the opportunity to participate in trade fairs abroad.

We really, really need the government assistance. We have livelihood programs in the region; our rural workers make a living because of export orders,he noted.

For his part, Emmanuel P. Padiernos, vice president for market development of Chamber of Furniture Industries of the Philippines (CFIP), said industry players need to continue their aggressive marketing and promotion efforts to achieve a slightly higher revenue target this and next year.

Padiernos pointed that competitors in the region like Thailand, Indonesia, Malaysia and Singapore get subsidies from their governments when they promote their products abroad.

The P1-billion ESF of the government could have been our answer for leveling the playing field,he said. Our industry is still very competitive with our strengths that others don't have! However, we need government support,he noted.

Padiernos said the export industry could provide the much-needed jobs and dollars for the country.

Only P200 million has been drawn of the P1-billion ESF. The government planned to divert the undrawn balance to the calamity fund.

Such fund was meant to help exporters cope with the crisis not only for trade promotions and foreign trade exhibit participation but also for more long-term projects that enhance the country's competitive advantages. -- Danielle Venz, PHILEXPORT News and Features <--back

4. Enactment of pending bills crucial to export development pushed

The Philippine Exporters Confederation, Inc. is pushing for the enactment of certain pending bills in the 15th Congress that are imperative to export growth.

The list includes Competition Policy or the Anti Trust Regulation bill, the Customs and Tariff Modernization Act (CTMA), the Omnibus Maritime Code, and amendments to the Export Development Act, Clean Air and Water Acts.

The enactment of the national competition policy could promote a level playing field and rid the country of harmful monopolies and anti-competitive activities.

The entry of more new players in the market would improve access to quality and affordable inputs to production, it reasoned.

Compliance to this ruling is also in accordance to our commitments to our development partners and render liberalization of key sectors effective,PHILEXPORT noted in the statement.

It also cited the need for the country to undertake massive reforms as it aligns existing laws with the standards and practices prescribed under the Revised Kyoto Convention (RKC).

To this end, the CTMA seeks to amend the provisions and update the Tariff and Customs Code in accordance to international standards in customs procedures and practices, it added.

Apart from pushing the enactment of these legislative measures, PHILEXPORT, working with the Networking Committee on Legislative Advocacy and Monitoring (NCLAM) under the Export Development Council, also raised the need to strengthen monitoring of legislative proposals, some of which have hidden threats and opportunities to exports, PHILEXPORT noted. Stringent monitoring is deemed necessary, it added.

Both groups also intend to build up linkages in key offices of Congress and create new ones, as necessary, to aid in sourcing up-to-date information as to the developments of identified priorities and relevant issues. -- Danielle Venz, PHILEXPORT News and Features <--back

5. Poland, an emerging market for houseware products

Houseware exporters may consider increasing their shipments to Poland, an emerging market for housewares, to offset last year's decline in purchases of top EU27 importers.

Citing International Trade Centre-Trademap data, Benjamin Chiu, market analyst of iSEARCH Philippine Exporters Confederation, Inc. Cebu, identified other chief EU27 houseware importers as Germany, France, United Kingdom, Italy, Netherlands, Belgium, Spain, Austria and Sweden.

These countries posted average import growths of measly -7.1 percent to 5.8 percent for the period 2005 to 2009.

Chiu said Poland, however, managed to trend at 10.5 percent growth in imports during the five-year period, which was exceptionally high compared to other EU27 importers.

Poland has become a medium-sized importer of housewares, accounting for 3.4 percent of the total EU27 imports in 2009, he said.

He said top imports of Poland in 2009 consisted of artificial flowers, foliage and fruit; tableware, kitchenware and porcelain/china; basketwork, wickerwork and other articles made from plaiting materials; ceramic articles; statuettes and other ornamental ceramic articles; and plaits and similar products of plaiting material mats, matting and screens.

The Philippines only ranked 21st among the suppliers, exporting around $457,000 of houseware products to Poland last year, just about 0.6 percent and one percent of the latter's total imports from China and Germany, respectively.

China and Germany were Poland's leading suppliers last year.

But despite lower imports last year, Italy, Germany and UK were identified as the primary markets in the EU27 region for the gifts, toys and housewares (GTH) products.

Other countries like France, the Netherlands and Spain were also listed as the GTH sector's secondary markets. -- Danielle Venz, PHILEXPORT News and Features <--back