PHILIPPINE Exporters Confederation of the Philippines (Philexport) Cebu executive director Fred Escalona is proposing that the government support exporters by subsidizing quality management system certifications to fast track their entry into foreign markets.
In an interview yesterday during the Department of Trade and Industry’s (DTI) One Country, One Voice forum discussing Europe trade strategy, Escalona said the Philippine government can emulate Thailand’s export strategy by subsidizing the exporters’ quality management system’s certifications.
In Central Visayas, less than 10 percent of exporters have quality management system certifications because of the high cost, making it hard for the remaining 90 percent of exporters to enter foreign markets.
“We have not reached the maximum,” Escalona said, referring to the maximum use of the European Union-Generalized System of Preferences Plus (GSP+) that allows the Philippines to export to EU-member countries 6,200 products at zero duty since December 2014.
The export official said EU countries are very particular with quality management system certifications, like the International Organization for Standardization (ISO) and Good Agricultrural Practices (GAP), among others.
Europe is a huge market for the Philippines, being the fourth largest trading partner after Japan, China and United States.
Preliminary data from Philippine Statistics Authority (PSA) showed that exports dropped for the straight 16 months. Merchandise exports dropped 13 percent year-on-year to $4.7 billion in July.
Eight commodity groups posted drops in exports--machinery and transport equipment (down 36.8 percent); woodcrafts and furniture (down 24.2 percent); other mineral products (down 18.9 percent); chemicals (down 18.7 percent); electronic products (down 14.8 percent); articles of apparel and clothing accessories (down 14 percent); ignition wiring set and other wiring sets used in vehicles, aircrafts and ships (down 1.8 percent); as well as metal components (down 1.7 percent).
Escalona does not see the export sector recovering in the medium-term, with the US elections seen to slow demand, plus the weakening global economy.
Currently, the Philippines is trying to seal a bilateral free trade agreement (FTA) with the EU to improve its market access and lock in the temporary GSP+ grant.