Welcome to Philippine Exporters Confederation, Inc.

July 31, 2009

1. PCCI welcomes foreign investments in agribusiness

The country’s biggest business organization took a strong stand in favor of a recent rise in foreign investments in big plantations for as long as the investors do not violate Philippine laws.

Philippine Chamber of Commerce and Industry (PCCI) vice president for agriculture Bobby Amores made the stand during an open forum during a recent announcement on the holding of the 2009 Philippine Business Conference on Oct. 20-21.

The question was raised due to a growing debate on whether the Philippines will open its doors to the raising of food and other farm crops like palm oil in large plantations by big companies. Investors with deep pockets from Malaysia, China, South Korea and several countries in the Middle East have been on the prowl since last year for large tracks of land in the country to raise crops that they plan to export to their home countries.

The latest that hit the news was a 46,000-hectare land in Mindoro which a South Korean private company leased from owners. The deal hit a snag when it was found that the investors did not consult the concerned government agencies like the Department of Trade and Industry (DTI) and the Department of Agriculture (DA).

“The investors should have consulted those agencies to be able to comply with Philippine laws,” Amores said. “If they organized a corporation which is 60 percent owned by local investors, they would have complied with the strict provisions of the Constitution on land ownership,” he said.

Amores, who also sits as a trustee of the Philippine Exporters Confederation, Inc. (PHILEXPORT) and head of the Philippine Food Processors and Exporters Confederation (PHILFOODEX), said there is nothing to fear on foreign investments in agriculture to bolster the country’s food exports.

“The problem with our agriculture policy,” he observed, “is the government’s fixation with raising rice and corn at the expense of other crops that could bring more income to farmers”. Foreign and local investors could bridge that gap, he explained.

The new interest in agribusiness from foreign players came on the heels of the rice crisis last year when international prices hit $1,000 per ton which turned out to be a bonanza to farmers in rice exporting countries like Vietnam and Thailand.

Foreign investors that have touched based with the Department of Agriculture (DA) have been more keen at producing high value crops like palm oil and rubber for the Malaysian, fruits and poultry for Middle Eastern investors, tropical fruits and vegetables for the Koreans and raw materials for biofuels for transnational green companies.

The DA has offered big areas of idle government lands for development while some critics have expressed concerns that the entry of foreign investors, intent at selling what they produce to their home markets, might undermine the country’s bid to be self-sufficient in food.

The Philippines has long become import-dependent in feeding its 90 million citizens exemplified by the importation of over 2 million tons of rice a year. -- Abe P. Belena, PHILEXPORT News and Features <--back

2. PHILEXPORT R3 ink deal with CDC for exporters showroom

CLARK FREEPORT – The Philippine Exporters Foundation, Region III, Inc. (PHILEXPORT R3) and the Clark Development Corporation (CDC), recently signed a lease agreement for the establishment of a facility that would showcase locally made export-quality products.

PHILEXPORT R3 President Randy G. Viray and CDC President Benigno N. Ricafort signed the agreement that has a lease term of 15 years with an expected P3.7 million investments.

The PHILEXPORT R3 and CDC collaboration will initially establish a furniture and home furnishings lifestyle showroom and trading house and eventually host the pasalubong center for manufactured products in Central Luzon and a tourism café.

The project would rise in a strategic 1,543-square meter area along C.M. Recto Highway here.

“Central Luzon, specifically Pampanga, is the home to the country’s finest furniture makers whose products found their niche in equally finest stores in the world,” Mr. Viray stresses.

He further noted that establishing the trade house at the Freeport zone is logistically wise as it hosts the international gateway called the Diosdado Macapagal International Airport that will make it convenient for the foreign buyers to visit the showroom. It is also center to rising establishments – business and residential within and outside the zone.

Due to open in November this year, this PHILEXPORT R3 project hopes to provide an alternative marketing tool to the exporters and manufacturers in the short term (with the global recession) and a permanent showroom that will cater to local and foreign buyers alike in the long term. -- PHILEXPORT News and Features <--back

3. Gov’t to step up efforts to tap Indian market for RP exports

The country will step up efforts to tap the huge Indian market, particularly its processed foods, personal care and furniture sectors. Philippine Trade and Investment Center (PTIC)-New Delhi commercial attache Vichael Angelo Roaring identified these sectors among the opportunities available for the local exporters.

To take advantage of these, Trade Senior Undersecretary Thomas G. Aquino instructed the Bureau of Export Trade Promotions (BETP) to organize a market opportunities briefing and information session designed for exporters producing processed foods.

Such briefing and session shall be conducted by the PTIC-New Delhi to processed food exporters located in Manila, Cebu and Davao.

Aquino noted these activities are important in anticipation of the much-awaited ASEAN-India Free Trade Agreement (FTA).

The Philippines and other ASEAN members are expected sign the FTA with India this August during the ASEAN Economic Ministers conference to be held in Thailand.

Philippine products and that of other ASEAN countries entering the Indian market would enjoy reduced tariffs under the agreement.

Likewise, Aquino directed the BETP to consolidate the “Best Bets Product Catalogue” of companies/brands in the processed foods and personal care categories that can market their products overseas.

To tap the Indian furniture market, the Center for International Trade Expositions and Missions (CITEM) shall consider organizing the country’s participation in India’s furniture fair perhaps by next year.

PTIC-New Delhi’s Roaring underscored the need for the Philippines to aggressively market itself as a global destination for the best design-driven furniture and home accessories.

“A major country and industry-specific promotional effort is essential for the Philippines to be on the map of India’s importers, architects, and interior designers,” he noted. -- Danielle Venz, PHILEXPORT News and Features <--back

4. Pursue niche marketing, exporters told

Exporters should pursue niche marketing to continue generating sales in a “buyers’ market”, according to an industry player.

“It’s a buyers’ market situation now. Obviously, the demand is low and a lot of vendors and exporters lost a lot of their sales and buyers (due to the global crisis). And even without the buyers prodding, they are offering discounts to be able to get orders not necessary for profit but just to keep their operations,” said Philexport Region 3 President Randy Viray.

He said a business thus needs to look for its “own niche” to ride out the crisis.

Viray said his furniture company Vivere Lifestyle Inc., for instance, is developing institutional markets like hotels, restaurants and interior designers. These are among the sectors which are in fact in growth mode. He said the local market is another niche of his company.

Viray added they also intend to invest in branding to create value for their products and command prices they want for such goods.

“We export to Europe, United States, South Africa and a lot of our buyers are still buying but on a very much reduced volume. And there are buyers whose purchases are increasing; these are our niches we need to strengthen,” he noted.

For his part, Johan Laman Trip, external expert of Netherlands-based Center for the Promotion of Imports for Developing Countries (CBI), said companies should prepare business plans to be accomplished within the next three years outlining product development and marketing efforts for their target markets.

Trip said they can involve other stakeholders in their plans.

Moreover, he encouraged creativeness and inventiveness among exporters, noting “It is important for you to do everything to keep your customers happy.” -- Danielle Venz, PHILEXPORT News and Features <--back

5. Educational institutions adopt curriculum based on industry needs

Domestic industries are closely working with educational institutions in adopting a curriculum based on the emerging needs of the industry. Ambassador Donald Dee, Universal Access to Competitiveness and Trade (U-ACT) chairman and member of the Presidential Coordinating Task Force on Education, said the industry-academe linkage in this area is crucial to generating more jobs in the country.

“We believe that’s the way we have to redirect our students and parents to enroll their children to sunrise sectors like the BPO (business process outsourcing). We are doing the same thing for sciences, engineering and HRM (hotel and restaurant management); we are identifying centers of excellence for these sectors,” he said.

Apart from these industries, Dee said, similar effort is being undertaken in other priority sectors namely: shipbuilding, electronics, healthcare, retail trade, maritime, manufacturing engineering and maritime engineering.

He said graduates of engineering and technical courses remain in demand. “We have brain drain because many of our technical people, engineers left the country. A lot of our domestic industries are saying they are having difficulty in replacing them.”

Dee earlier said there were 200,000 to 300,000 skills-related jobs available for the workers. Bulk of these was in the call centers industry while others were welding, shipbuilding, small machinery production and tourism-related employment.

To improve the country’s education and produce more employable graduates, Dee said they are also determining courses that need additional years.

“That is what we are focusing, (we are identifying) the courses which require additional year… and then make it easier and more flexible for the educational institutions to adopt their curriculum,” he noted.

Likewise, Dee said their efforts are geared towards making the testing method of schools more scientific.

“Every school uses the same entrance exams but they will have to establish their passing/acceptance mark,” he explained. “ (Unlike) In the past, when students want to go to higher education, they have to apply in different schools’ entrance exams.” -- Danielle Venz, PHILEXPORT News and Features <--back