"The Philippines is keeping its lead in VCO production over Indonesia which could be a competitor in the world market. However, considering that our country is ahead of them in this technology, we have a competitive edge with foreign investors interested to venture in this industry," said Carlos Carpio, PCA deputy administrator for research and development.
In a paper presented during a symposium on virgin coconut oil at the Traders Hotel in Roxas Blvd., in Manila, Carpio said the PCA recorded a large increase in the volume of VCO exports  from 1.80 metric tons (MT) in 2001 to 475 MT in 2005.
Carpio said the 475 MT exported in 2005 was worth $1, 612, 323 with the United States absorbing 93.79 percent of deliveries followed by Australia with 1.9 percent share.
"The increasing number of destinations was only realized in early 2006, as increasing demand for Philippine VCO in other countries like Canada was recorded," Carpio said.
Other countries producing VCO are Thailand and Indonesia. Carpio said these countries "are fast moving in product development to be able to compete with our VCO."
"Thus, market positioning of our VCO has to be assured through quality and price competitiveness to maintain our present status," he said.
"These can be achieved through concerted efforts of the concerned agencies with the necessary government support," Carpio said, adding the government and private sector have to increase funding for research and development on processing technologies and to conduct more medical studies to support the claims on various health benefits of VCO.
Meanwhile, Carpio said the current problem confronting the VCO industry is how to make the benefits tickle down to the marginalized sector of the industry  the coconut farmers.
"The current high-priced coconut-based product both in the domestic and export markets did not make a difference in terms of its contribution to the increase in income of the coconut producers," Carpio said.
Carpio said the price of the whole nut for VCO is the same as that of the nut purchased for traditional coconut oil mills by traders.
"As such, no additional direct benefit for the coconut farmers occurs despite the economic opportunities for the VCO manufacturing," Carpio said.
Interest on VCO is spreading because of its purported health benefits. Reports state that a 1999 local study revealed that VCO could reduce, if not totally wipe out, the human immunodeficiency virus (HIV). The study showed that the coconut chemical lauric acid could inhibit, delay and reduce the spread of HIV.
Meanwhile, Carpio said out of the 218 VCO producers in the country, only 40 were registered at the Bureau of Food and Drugs, most of them from the National Capital Region and southern Luzon.
The country also remains number one exporter of traditional coconut oil and other coconut products, he said.
It is second in the world in terms of area planted to coconut at 3.1 million hectares, he added.
However, Carpio said a shortage in the supply of nuts is expected soon.
"With the increasing demand for VCO, the need for more raw materials will eventually result in abrupt reduction of nut supply to oil millers and desiccated coconut plants," Carpio said.