The necessity for more exports

( Second of three parts ) Exports where we have the competitive advantage

Having established the necessity, if not urgency, of promoting an export-led economic growth, the next natural query is the matter of what particular product or products should be exported from the country? Posing the question itself already half answers it because the query at once suggests that not any or not all locally produced goods should be exported.

At present, in order to maximize export earnings, local businesses and entrepreneurs must concentrate only on the export of products where we have the competitive advantage. These pertain to products that we could develop through time that will position us to compete with other exporting countries. These refer to goods which we are capable to produce in great quantity and at high quality standards with the least production cost. In other words, these are products that we are globally competitive in.

The following are goods and products with strong competitive potential: animal feed ingredients, cut flowers, livestock and poultry, fresh and processed fruits, fresh and processed vegetables, garments, electronics (software and hardware), fishery and marine products, and metal engineering products.

By concentrating for the moment on the export of these products where we currently enjoy a comparative advantage over other exporting countries, we should be able to maximize our export potential. In the process we will earn valuable foreign currency so desperately needed to strengthen our economy.

Export of labor and services

Another significant source of foreign currency earnings is through the remittance of our Overseas Filipino Workers (OFWs), better known as Overseas Contract Workers (OCWs). To date, our OCWs have contributed in no small measure in the accumulation and increase of our foreign currency reserve and have provided as well an attenuating factor in the effort at bridging the gap of our trade deficit.

The reason for their huge contribution to the national coffers stems from their numbers, and they are plenty. In year 2002, we deployed a total of 8.9 million OCWs, 6.8 million of which are land-based while two million are sea-based. Through the years, our exported labor force has steadily increased. With this massive export of Filipino laborers abroad, it is not difficult to imagine the extent and amount of their contribution to the country’s foreign currency coffers through remittances from foreign lands. To dramatize their gargantuan contribution to the national economy, remittances from OCWs reached $6.933 billion as of 2002, of which $5.707 billion came from land-based workers while $1.226 billion came from sea-based workers.

The point, in illustrating the magnitude in terms of the number of our OCWs, as well as the magnitude in terms of their foreign currency remittances, is to emphasize the importance of their role as a whole in helping stabilize the local economy. They increase our foreign currency based and contribute to the appreciation of the peso.

It does not mean, however, that as a matter of national policy and goal we must encourage the export of local labor to the detriment of our own domestic labor and skills requirements for the development and growth of the home-based businesses and industries.

What should be properly done, in the meantime that the local economy cannot provide suitable and ample employment to our labor force is to export our labor and services to countries that have need for them. This way, we are able to make the most of what Filipino export labor can achieve abroad. That is to vastly contribute in the accumulation of foreign currency, especially dollars, to support our international financial position and standing.

On a positive level too, the exodus of Philippine labor abroad at this stage of our economic development is helpful. Had they remained at home without finding gainful employment, the government would not have been spared the burden of seeing to their welfare through social welfare expenditures. To a great extent, these overseas workers have spared themselves and their families the ignominy of being an economic and social burden to society. Even for this alone, the passion and determination of our overseas contract workers to help themselves, even as it entails tremendous sacrifices and inconveniences in the process, must be aptly and amply extolled and recognized.

So, and for as long as the situation remains the same, there is a compelling need to upgrade our overseas employment program. This is to further develop the skills of our unemployed and employable work force to enable their services to be exportable and to be globally competitive with the rest. The key then for now is to elaborate on our manpower-training program for exportable skills, provided we do not deplete our manpower requirements that are so essential in developing our country.

In this regard, we must carefully identify the countries where we can and should export our surplus labor to. As expected, these countries would be the more developed ones that have reached that level of industrialization as to have more industries and employment opportunities than their local labor force can man. Countries such as the Kingdom of Saudi Arabia, Japan, the United Arab Emirates, Kuwait, and Oman, to name a few, are the choice destinations where abundant employment opportunities abound.

Still and all, the basic strategy should be for us to strive as a nation to create the employment opportunities in the country to eliminate the need for our own labor force exporting their skills, talents and services to foreign lands. Instead, we can make good use of them at home for the growth and development of the country. This, or course, can only be done in an expanded economy with abounding industries, businesses and enterprises willing and capable of absorbing the labor force. Until then, however, we must make the most of the exportation of our labor force in faraway lands by properly training them for the purpose.

(You may write your comments / suggestion at 15/F Equitable Bank Tower Paseo de Roxas, Makati City or through e-mail at [email protected])

(Editor’s note: Atty. Roxas is writing a limited series of articles dealing with financial matters and other important business topics.)