"The law is requiring the banks to be active players in the development of small enterprises by giving them access to credit. Making bank money flow to MSMEs is a major step towards creating new, decent jobs in the countryside," Ortiz-Luis pointed out.

He however lamented the fact that a draft IRR presented to the business community again opened new alternative ways of compliance to the law, not direct lending to the tiny and small enterprises.

A third quick-win suggested by the export leader are reforms at the Bureau of Customs. He said that with the accession of the Philippines to the Revised Kyoto Convention early this year has institutionalized the framework to push through the reforms are already in place.

With the accession, the Philippines is duty bound to comply with the simplified and harmonized rules on customs administration that requires automation and computerization of customs processes and procedures and the setting up of a single window in the processing of import and export documents. -- Abe P. Belena, PHILEXPORT News and Features <--back

2. Coalition of dollar earners to seek BSP mandate review, competitive peso

A coalition composed of the economy's dollar earning sectors will be formed to seek a review of the mandate of the Bangko Sentral ng Pilipinas (BSP) beyond inflation targeting and work for exchange rate policy reforms that favor a competitive peso.

The decision to build a coalition was reached by some exporters and supporters after mid-year general meeting of Philippine Exporters Confederation, Inc. (PHILEXPORT) members last Wednesday.

The planned coalition was seen to involve some of the country's best economists, organizations of families of Overseas Filipino Workers, the Association of Services Exporters, enterprises in the tourism industry and exporters.

Among other things, the bigger coalition will join PHILEXPORT in asking President Noynoy Aquino to review the mandate of the BSP which its officials have been insisting as inflation targeting, instead of what economists point out to be economic growth and development.

Explaining the situation during the meeting, PHILEXPORT president Sergio R. Ortiz-Luis, Jr. pointed out that the OFWs alone, at about eight million, hurt by a strong peso policy, support about half of all households in the country.

If the other dollar-earning segments of the economy, the business process outsourcing industry, tourism and exports, are added, whether one talks about numbers or their contribution to the Gross National Product, they represent a majority of the population, he added.

During his speech, the export leader said "some of the best economists we consulted have argued that economic growth and progress, not simply the control of inflation, is the main mandate of the BSP. Its officials have, however, keep on harping at reining in inflation as its primary mandate.

BSP's bias to control inflation has been used as an excuse at keeping the peso strong against the US dollar at the expense of OFWs and the exporting community, he added.

In the aftermath of the global financial meltdown, central banks across the globe have been tightening their regulatory functions and managing their exchange rates to strengthen their exports.

"The BSP, situated in a poor country like ours, has been the rare exception in invoking its adherence to market forces, even when those market forces have been proven predatory, undisciplined and abusive," Ortiz-Luis said. -- Abe P. Belena, PHILEXPORT News and Features <--back

3. ASEAN single shipping market envisioned by 2015

To help boost intra-ASEAN trade and tourism, an ASEAN single shipping market is set to be implemented by 2015.

The realization of a single shipping market is expected to promote greater connectivity, efficiency and competitiveness of the transport networks within the region which is crucial in boosting intra-ASEAN trade as it strengthens regional production and distribution networks.

This envisioned ASEAN single market is detailed in the ASEAN Strategic Transport Plan (ASTP) 2011-2015 project jointly undertaken by the ASEAN Secretariat and the Economic Research Institute for ASEAN and East Asia (ERIA).

ERIA's is a policy think tank mandated to provide technical support for ASEAN Secretariat in furthering Regional Integration and Cooperation ultimately aimed at building an ASEAN Economic Community which will serve as a building block for a wider East Asian regional integration.

As a significant step towards the realization of an ASEAN single shipping market a set of strategies will be developed by 2011 taking into account the various issues and concerns of all ASEAN member states regarding the concept of a single shipping market.

Establishing a single shipping market entails the liberalization of the sector and massive investment in the development of infrastructure and human resources.

Given the gargantuan investment that will have to be made by the government, PHILEXPORT trustee for the chemical sector raised concern about the grim possibility of incessantly facing high cost of shipping despite all the public investments made in infrastructure and human resource development.

"The government should ensure that all the investments made to upgrade port infrastructure will translate to lower cost of shipping," Oscar A. Barrera said.

With a few multinational companies dominating the domestic shipping industry, Barrera likewise noted that the cost of shipping in the country has been unreasonably high.

For instance, as Barrera cited, the cost of shipping from Davao to Suluwasi is higher than from Sulawesi to Vietnam when the Philippines is much closer than Vietnam to Indonesia.

In line with the envisioned single shipping market, ERIA will develop guidelines on acceptable practices in the provision of fiscal support for shipping operations by 2011.

ERIA will also push for the privatization and commercialization of port operations as well as the simplification and harmonization of port documentation by 2014. -- Ritchelle Alburo, PHILEXPORT News and Features <--back

4. Offering quality products at competitive prices key to capturing more markets

Exporters need to work doubly hard to further improve their productsquality and sell these at competitive prices crucial to capturing more markets and recover fully from the impact of the global slump.

Myrna Bituin, Philippine Exporters Confederation, Inc. (PHILEXPORT) trustee for the furniture sector, believes that some furniture makers may consider serving the high-end A and B markets as the sector already lost the low-end customers and revenues went down by 50 percent last year.

"Maybe what the exporter has to do is really find their own niche in a market where the prices are not being compared with China and Vietnam. So you should put more efforts on the quality of your product for it to be acceptable," Bituin said in an interview.

She said the United States, the country's biggest export market, is not yet growing.

Thus, Bituin, the director of Pampanga-based Betis Crafts Inc., said her company is eyeing the so-called BRIC nations comprising Brazil, Russia, India and China, apart from the Middle East and the United Kingdom it is currently serving.

"But we have not fully tapped those markets. When we penetrate those markets in the next two to three years, that is when we can only say that we are bouncing back," she noted.

However, Bituin stressed that prices are always a problem the exporters face in catering the high-end and low volume niches.

Her company is implementing various measures to address this issue, foremost amongst these is product engineering.

"Even if it is an old product, we really have to look into the engineering. We are looking into the areas where we can cut cost but product quality is maintained," she said.

It also created a unit for small orders to improve the company's services, she added.

Bituin said the company likewise has developed more programs for the workersbenefit which could the pave the way for continuous productivity.

"And what made us sustain is we have good relationship with our clients. That he would not exchange good relations for just $10. I think that's also the key," she said. "For me, if it is a defective product, I don't send it to my clients. It's a culture." -- Danielle Venz, PHILEXPORT News and Features <--back

5. Competitiveness-enhancing measures to improve business environment

Export industry players are encouraged to aggressively implement productivity-enhancing measures and work together to ensure maximum effectiveness in achieving competitiveness goals.

This was stressed by Roberto Amores, Philippine Exporters Confederation, Inc. trustee for fresh and processed food sector, during the recently held PHILEXPORT general membership meeting.

"We need to consolidate our resources, efforts and ideas and harmonize our strategies so as to maximize cooperation and synergies as well as efficiencies from the provision of key infrastructure, technological support, trade finance and export marketing assistance," he said.

Amores cited a result of a competitiveness survey of an international group identifying Philippine infrastructure as among the culprits for the further decline in the country's competitiveness ranking.

This is along with the perennial problems of corruption and inefficient government bureaucracy.

He traced the decline in the competitiveness of the business sector to grave policy neglect of critical competitiveness-enhancing measures, particularly the setting-up of both hard and soft infrastructure, the imposition of counterproductive bureaucratic policies and procedures and poor implementation of laws and outright corruption.

"The country reeks of bad governance and it is poisoning business," Amores said. "It is increasing the cost of doing business, sapping competitiveness, and making it extremely difficult for the export sector to thrive in an increasingly competitive global environment."

To this end, Amores hoped that good governance would be achieved under the new government.

He also expressed optimism that the Aquino administration would provide critical support particularly for the export sector.

"There is a need for our trade policy to be supportive of our export strategy and vice versa if we are to increase market access gains, establish intelligence networks in key markets, strengthen service-oriented trade promotion organizations, and enhance the export capacity of micro, small and medium enterprises," Amores said. -- Danielle Venz, PHILEXPORT News and Features <--back

6.China huge market for RP products

China offers huge market opportunities particularly to Filipino exporters.

Alexander Tan, director of the Philippine Chamber of Handicrafts Industries, Inc. (PCHI), opined this based on the revenue result of participating companies in the ongoing six-month Shanghai World Expo 2010 that started last May 1.

Tan estimated a company could gain sales of P140,000 a day or around P4.2 million a month in the exposition.

He said Chinese buyers are fond of pearl jewelries and those made of sea shells sold for about P335 to P420, and key chains made in the Philippines. They also go for housewares and accessories.

"Many Chinese people from the province arrive by buses. They buy for personal consumption and souvenir (for loved ones or friends). The purchasing power of the Chinese people is there, it is just a matter of tapping it," he noted in an interview.

With this, Tan said China could be a big market for local products, considering that Shanghai alone has already 20 million population.

"In fact, handicrafts makers in Cebu are already shipping fashion jewelry components to China. The latter assembles these into finished products for local consumption," he said.

Amid rosier prospects, Tan said, the Philippines should have shifted its manufacturing to China.

"Filipino exporters tend to focus in the United States and Europe. We don't know that our neighbors have already purchasing power," he pointed out.

Meanwhile, organizers expected to attract 70 million visitors from around the world in the Shanghai expo which runs until October 31.

Tan said around 45,000 people visit the Philippine pavilion every day. Participating companies sell their products from 9 a.m. to 10 p.m. -- Danielle Venz, PHILEXPORT News and Features <--back