EXCITING opportunities for growth and expansion are in store for Cebu’s export industry in 2018.
This was the outlook of the Philippine Exporters Confederation Inc. (Philexport) Cebu chapter, as global trade recovery is expected to stay on course amid the challenges in the world economy.
“If you compare 2016 versus 2017, this year is a lot better. Although export is still in the recovery phase, the momentum has already been established,” said Philexport Cebu executive director Fred Escalona.
“In fact, everybody is bullish for 2018,” he added.
Export player Pete Delantar of Nature’s Legacy Eximport Inc. shared the same sentiment, saying that the country has captured a lot of opportunities this year, specifically in terms of trade and promotion.
He noted that the country’s hosting of Asean 50 has put all the export-quality products in the global spotlight.
The Philippines’ chairmanship of the Association of Southeast Asian Nations (Asean) this year coincided with the 50th anniversary of the founding of the group.
Promising
“2018 is a promising year. The economy in the US is expected to improve, and Japan offers opportunity for growth as it hosts the Olympics in 2020,” said Delantar, one of the trustees of the Chamber of Furniture Industries of the Philippines.
Exporters in the Philippines are working toward hitting a target of $122 billion to $130 billion in exports of goods and services by 2022.
Preliminary first-half reports from the National Economic and Development Authority (Neda) 7 showed that electronic products remain the top export product of Central Visayas. However, exports of non-electronic products have been picking up recently.
In 2017, eight of the region’s top 10 exports were non-electronic products, including woodcraft furniture, and processed food and beverage (F&B).
“This is good, especially for the raw material producers in the region, and nearby regions,” the Neda 7 said.
Import expo
Moreover, the warming ties between the Philippines and China are also making the outlook for next year a lot rosier.
Escalona said the mounting of the China International Import Expo on Nov. 5 to 10 in Shanghai, China, for instance, would be a perfect avenue for Filipino exporters to expand their market reach and forge new business partnerships with the Chinese investors.
“We are excited about this because this is the first government-initiated expo. It’s like China opening its doors to do more business among its neighbors,” said the Philexport official.
Escalona downplayed concerns that the expo might expose the country’s products to China’s counterfeit goods industry. But he advised exporters to become a “moving target.”
“If you are scared of being copied, then you should be a moving target, which means you have to constantly create something new. If they copy your 2018 collection, then your 2019 collection should be ready such that when you unveil it to the market you are already in an advance position,” he pointed out.
Despite concerns about products being copied, the Philexport official sees the expo as a chance for the country and China to collaborate.
Escalona explained there are plenty of raw materials in China that the country can draw from. The rule, however, is to sell to China only the finished products.
“We can import raw materials from China and combine these with ours to create a higher-value product,” he said.
The China International Import Expo will showcase two exhibitions, one on the Belt and Road countries’ trade and investment, including their goods and services, tourism, and featured products; and the other on varied business sectors, including consumer electronics, auto, clothing, food, medical equipment, service outsourcing and education.
The expo will be attended by state leaders, ministers, heads of international organizations, business representatives and scholars.
Build! Build! Build!
Moreover, exporters anticipate a more vibrant business condition starting next year as the Duterte administration’s massive Build! Build! Build! program starts to take off.
“The construction boom will continue to fuel growth in the furniture and home decor sectors,” said Escalona, adding that since the 2008 economic crash, the domestic market has become the “bread and butter” of the furniture industry.
“The trauma after the mortgage crash in 2008 is still there. The good thing now, though, is that the trauma is not growing anymore,” said Escalona.
Neda 7 also sees a turnaround for the export sector in 2018.
“With the increase of non-electronic products in the region’s exports, specifically furniture and processed F&B, it is expected that this will create higher demand for local raw materials, which are good for local producers,” said Neda 7 in its report.
Financing
Amid the upbeat forecast, Escalona said financial access has remained a burden among exporters.
He said this is an area where exporters have not seen any significant improvement.
“Government funding, subsidies during international trade fairs would be a big help for exporters to realize their targets,” said Escalona.
Moreover, the year 2018 also calls for the massive adoption of technology in the export business.
Philexport president Sergio Ortiz-Luis Jr. said exporters need to fully embrace technology to remain competitive in the global market.
Having a presence online is just one of the many ways for exporters to enhance their entrepreneurial capabilities and to remain relevant, he said.
Digital economy
Escalona said future initiatives of Philexport Cebu will gear toward equipping local exporters with the right market intelligence to help them become big in the digital economy.
“We will do a lot of market research and invite IT (information technology) players to Cebu to help our members know how to get into this eCommerce space,” said Escalona, who also noted that intensive eCommerce sessions have been ongoing for Manila exporters.
The Department of Trade and Industry, through its Export Marketing Bureau, sees solid growth for Philippine exports this year as it continues to expand by 11.68 percent during the first 10 months of the year with total sales of $53.11 billion.
October export sales alone increased by 6.6 percent from $5.04 billion last year to $5.37 billion this year.
Japan remains the top export destination for October with total export receipts of $871.36 million and a share of 16.2 percent in total exports.
Meanwhile, the leading destination for the country’s merchandise exports for the first 10 months of the year was still the combined markets of China and Hong Kong. Shipments to this combined market, with a share of 24.31 percent, increased by 22.10 percent in value.