Exporters eye other markets to perform better this year

Despite performing poorly last year, local exporters still remain optimistic of recovering this year.

Ramir Bonghanoy, Gifts, Toys and Houseware (GTH) Foundation president, said the GTH sector had not grown at all last year.

But he said this was better than losing.

“We are still optimistic that we can recover soon. 2012 could be the year for us to finally see a better light but that will really depend on how our major markets like the US and Europe recover from the crisis they are in today,” said Bonghanoy.

He, however, wasn’t expecting a huge growth this year. But he said that local exporters had found ways to grow despite the setbacks in their major markets — the US and Europe, which are suffering from an economic crisis.

Fred Escalona, Philexport Cebu executive director, agreed with Bonghanoy.

Escalona said that most exporters were now looking at other markets outside US and Europe.

“There have been shifts by our exporters to other markets specifically in Free Trade Areas such as the ASEAN (Association of South East Asian Nations), China, Japan, Australia-New Zealand, as well as alternative markets such as the domestic markets,” said Escalona.

Asteria Caberte, Department of Trade and Industry Central Visayas  (DTI-7) regional director, also agreed with Escalona.

Caberte said the DTI was drafting many FTAs with other countries that showed a huge potential for our export products.

She also cited the aggressive promotion of export products in the domestic market with exporters banking on the huge tourist traffic in Cebu.

“The opening of the Tindahang Pinoy is our way of bridging the exporters to the local market and the tourists that visit us. This is one of the bright ideas that DTI and DOT (Department of Tourism) has partnered in together with the industry players,” said Caberte.

The Tindahang Pinoy opened in Dec. 5 in Bridges Town Square along Plaridel Street in Mandaue City, which is accessible for tourists to drop by before going to the airport. It is managed by the GTH Foundation which will soon partner with travel and tour operators for the inclusion of the shop in their itineraries.

Issues

Bonghanoy said the global trend for export products had always been into natural raw materials which could be used or merged with modern metals and designs, which the country including Cebu had already been known for.

“We see the demand for more ‘green’ and natural products but the challenge is the availability of raw materials. We have already raised the issue on the banning of direct importation of raw seashells to other countries to the Bureau of Customs and we are hoping that they will immediately act on this,” said Bonghanoy.

Caberte said the DTI people would need more venue to discuss with the private sector to make them understand the benefits of the FTAs because not many were taking advantage of it.

Caberte said that DTI would continue to encourage exporters to maximize the existing free trade agreements we have with other countries like China, Japan, South Korea and Australia.

Other agreements  currently being drafted include one for BRICA or Brazil, Russia, India, China and ASEAN as there are some signs that these emerging economies, particularly India and China, will have greater participation in the global economic recovery, said Caberte.

Escalona, for his part, said that exporters could do “SMART Exporting” by ensuring that supply and value chains would be efficient and free of bottlenecks, which would need the help of the Bureau of Customs to lessen the cost of bureaucracy.

He said exporters could also increase support funds to help develop exports and promote these in the international markets and fast-track all automation projects.

If these issues are addressed, he said, perhaps exporters could perform better this year.

Escalona said last year the declines in export performance for the of month of June (minus 9.4 percent), August (minus 13.7 percent) and September (minus 27.4 percent) point to a weakening run up toward the end of the current year.

Escalona even said that with this performance he wasn’t expecting growth in the industry this year.

A DTI report showed that the  region’s overall trade performance declined  by 3.83 percent in the first half of the year including a 48.9 percent decrease in imports and a 42.3 percent drop in overall export value.

Total imports decreased to $834,901,498 from 2010’s $1.6 billion while exports decreased to  $967,029,084 compared to $1.17 billion in 2010.

According to the Bureau of Customs, electronics accounted for 40.2 percent of the region’s exports followed by other industrial goods at 14.65 percent, steel and metal products at 10.14 percent, electrical equipment contributed 9.38 percent, garments with 8.22 percent, vehicles and machinery parts with 4.06 percent, furniture with 2.99 percent, other consumer goods at 2.84 percent, fashion accessories at 2.19 percent, and gifts, toys and housewares with 2.11 percent.