A threatened sunshine industry

As the integrity, credibility and legitimacy of the national leadership undergo continuing challenge, several developments in the international market are occurring that undermine the competitiveness of our products abroad. Since these are not sensational and juicy stories, they escape media’s attention and consequently are not in the government’s list of priority action.

One such development is Mexico’s bold and blatant move to brand their homegrown mangoes as Manila Mango. Clearly recognizing the marketability of Philippine mango, Mexico cleverly moved to obtain the patent for the use of Manila Mango as a brand name to be labeled on their mangoes while aggressively promoting and marketing them in the United States and in the international market.

Back in the 1980s, the same thing happened to the Philippines’ very own fish sauce or patis. At that time, local fish sauce manufacturers, especially the owners of the famous Rufina Patis, were caught off guard and watched helplessly as the Rufina Patis trademark was patented by Thailand as a product manufactured in their country. The Philippines was not able to do anything to recover the label despite a protest lodged against the Thai importer who registered the product as its own.

I understand the Philippines already raised the issue of Mexico’s action in various intellectual property rights fora overseas, but nothing concrete came out to support the country’s claim to the exclusive use of Manila Mango. Officials from the Department of Trade and Industry and the Department of Agriculture are reportedly contemplating on taking the matter to the World Trade Organization (WTO) and formally filing a diplomatic protest against the government of Mexico.

Unfortunately, the process, if ever it prospers, will be a long and winding road. In the meantime, Mexico sells its mangoes as Manila Mango and strengthens its dominance in the US market.

Cracking The US Market

Apart from the patent and use of brand name issues, the Philippine-produced mango still has not made much headway in the US. One reason is that the Philippine government and the private sector have yet to bite the bullet and agree to invest in setting up US-developed irradiation facilities to removing pests and prolonging the shelf-life of mangoes. All fresh produce are required to undergo this process using this facility before entry into the US is allowed.

Our current biggest market, Japan, which has equally stringent quarantine rules, has accepted vapor heat treated mangoes grown in various mango-producing provinces in the country. However, the United States Department of Agriculture is insisting on setting up an irradiation facility that will be used to treat mangoes before being transported to the US. The facility does not come cheap at an estimated cost of P500 million each.

Currently, Philippine mango exporters have a hard time exporting to the US because of transport and handling costs, and the fact that the US only accepts mangoes grown in the mango pulp weevil-free zone in Guimaras Island in the Visayas.

Cracking the US market may take some time even if we eventually, by stroke of luck, win the right to use the Manila Mango brand. Even then, there are other large international markets to penetrate and develop. But first the government and private sector must address some pressing concerns of the local mango industry.

Production And Compliance Woes

Foremost of these concerns is of course the competitiveness of local mango production costs. Even as the industry is a major export earner, it still faces a myriad of challenges. These include concerns such as unstable low yields, delayed and high costs of inputs, limited capital, inadequate cost effective transportation and handling and other logistic facilities, limited use of IT systems and applications, and high cost of packaging, among others.

In addition to production concerns, there is also the issue of meeting the environmental and health requirements of its export markets. There is a need also for an intensified information dissemination campaign targeting plantations and particularly small farmers pointing out the importance of implementing agricultural practices that comply with the environmental standards required by the different export markets.

A case in point is the okra industry that took a hard fall in 2001 when Japan, its biggest buyer, stopped buying fresh okra as it exceeded the maximum residue level prescribed by Japanese health authorities. It took awhile to recover the annual export earnings, but the industry took stock of its problems. By 2006, the Philippines is expected to dislodge Thailand as the top exporter of fresh okra to Japan.

Darkening A Sunshine Industry

There is every reason to invest in keeping our Manila Mango the Super Mango. We are currently the second largest exporter of fresh mango in the world next to Mexico and there are still many opportunities, not only for fresh mangoes, but also for processed mango products like dried mango and mango puree.

I always believe that the agri sector will provide relief as our economy continues to plod along. And we have a sunshine industry in the production of mangoes and other mango-based products. Let’s hope that those in the industry and those in the government who still have the country’s concern at heart will not allow inaction and complacency to darken it.

‘Breaking Barriers’ With A. Petrucci, Amkor Phils. President

The semi-conductor and electronics industry is a major export revenue earner not only in the Philippines but also in the region. At present, neighboring countries are developing this sector in their economy. Perks and investment incentive packages are continuously being upgraded by the different countries as they compete for the investment dollars available from this sector. The Philippines has two distinct advantages. One is the existing infrastructures built over the years, and the other is the country’s strategic location that facilitates cost-effective distribution of components to equipment manufacturers located in several countries in the region. The Philippines is also becoming the center of competence as other countries source for qualified technical staff.

There are several challenges that the government has to face as it exerts efforts to maintain and expand the presence of this vital industry. The negative image of the country abroad in terms of corruption, peace and order, and stability is not helping arouse the interest of existing companies to expand and broaden the industries‚ scope. And, lately, the increasing cost of doing business, particularly the cost of power, is adding pressure on the viability and competitiveness of the local semi-conductor and electronics companies.

What is the strategic importance of the semiconductor and electronics industry in the Philippines? What are the industry‚s problems? Is the local semiconductor and electronics industry healthy enough to compete against China and other countries in the region? Are the incentives provided for by the economic zones where most of the semi-conductor and electronics companies are located competitive with those offered by other countries?

Join us in "BREAKING BARRIERS" on Wednesday, 22nd June 2005, IBC-TV13 (11 p.m.) and gain insights into the views of Anthony Michel Petrucci, Amkor Technology (Philippines) Inc. president, on various issues related to the semi-conductor and electronics industry both locally and globally and how Amkor Technology, Philippines, is responding. Watch it.

Should you wish to share any insights, write me at Link Edge, 4th Floor, 156 Valero Street, Salcedo Village, 1227 Makati City. Or e-mail me at reygamboa@linkedge.biz. If you wish to view the previous columns, you may visit my website at http://bizlinks.linkedge.biz.