FILIPINO manufacturers and exporters should start making their operations socially compliant, as foreign buyers are increasingly rejecting suppliers based on non-compliance issues, according to the leader of a group of foreign buyers’ representatives in the Philippines.

Robert M. Young, chairman and president of the Foreign Buyers’ Association of the Philippines (FOBAP), said their group has recently begun an advocacy to promote corporate social responsibility (CSR), since it’s an increasingly important global issue that Filipino businesses can no longer afford to ignore.

“We have many buyers coming over, and I would say 50 percent of them are not pushing through with the orders” primarily because many Filipino factories are not compliant, said Young in an interview with PHILEXPORT on the sidelines of their seminar on social responsibility held last Oct. 4 in Makati City.

Buyers now are asking for a “seal of good housekeeping,” and products from non-compliant factories won’t be permitted to enter the importing country.

Noting that small and medium enterprises (SMEs) often equate compliance with added costs, Young said this is the wrong mindset. “They don’t understand that the whole world now is changing their rules and regulations on importing products from other countries.”

He acknowledged that SMEs face many challenges on the road to social compliance, including the high cost of power, lack of financing, and increasing wages. So, he recommends that the government consider a reward program involving, for example, access to financing and tax deductions, to encourage the rise of ethical factories. (Philexport News and Features)