Friday, August 24, 2007 Furniture still ‘promising’
DESPITE reported losses in the export sector, particularly among furniture exporters and seaweed processing companies, the National Economic and Development Authority (Neda) identified the two industry segments as promising investment areas in Cebu.
During the 4th Sun.Star Economic Forum at Marco Polo Plaza yesterday, Madelyn Escandor of Neda also named shoe manufacturing, shipbuilding, seaweed processing, medical tourism, knowledge process outsourcing, and film and entertainment as “promising” industries in the province.
But academe and industry representatives think otherwise.
Mandaue Chamber of Commerce and Industry (MCCI) president Eric Mendoza said not all furniture manufacturers have a bright future.
He said only furniture exporters who cater to high-end markets will experience further growth. Those that cater to low-end buyers, producing cheaper furniture, are in their “sunset” phase, he added.
“Endangered” businesses
Dr. Victorina Zosa of the University of San Carlos, on the other hand, identified furniture, fashion accessory, gifts, toys and house ware export sectors as “endangered businesses” along with: information technology; health and wellness; engineering and construction; metal working; and shipbuilding.
Zosa, a reactor to the Neda report presented by Escandor, said these industries are under threat due to lack of skilled workers.
In her presentation, Escandor said Central Visayas is the country’s fifth largest regional economy. Most of the region’s economic performance is driven by manufacturing industries and the services sector in Cebu, she added.
She said Cebu plays a large role in regional growth.
It has dominated the export industry outside of Luzon, strengthened the tourism industry, reinforced the country’s bid to be the e-services hub in Asia, provided alternative site for investments and increased government revenues.
Escandor said Cebu accounts for 46 percent of total exports in Visayas and Mindanao while the rest of the provinces outside Luzon make up 54 percent.
She admitted, though, that consumer and industrial export manufacturers as well as food and food preparation sectors have posted negative growth last year.
She also said growth in the seaweed processing sector has been hindered by limited supply of raw seaweeds.
Losses
The export sector in Cebu has reported losses caused by the appreciation of the peso against the dollar.
The rise of the local currency’s value has not only caused Philippine exports to be less competitive in terms of price, but also diminished the income of export companies which find that their dollar earnings are equivalent to fewer pesos.
But Mendoza said the appreciation of the peso against the dollar is just an aggravating factor.
Local furniture exporters have been suffering due to cheaper furniture exports from China and Vietnam.
Only furniture companies that have found their niche in high-end markets will survive, he said. Those who want to stay up should also tap emerging high-end markets instead of focusing on enhancing marketing in traditional markets like the United States, he added in an interview during the economic forum.
Still, he said government should review its monetary policies because the effects of the peso’s rise against the dollar are “devastating” on exporters and business process outsourcing companies.
“Some economists are saying there is a need to tame the peso, that it is overvalued. The monetary board has to look into that,” he said. “(Besides) efforts offered by the government (to cushion industry from the negative effects of the peso’s appreciation) are not enough.” (LAP)
