Exporters ask government for P1-billion support fund

MANILA, Philippines - Exporters are asking the government for a P1-billion export support fund (ESF) to help small and medium sized exporters cope with the strong peso and the continuing decline in global demand.

Philippine Exporters Confederation Inc. (Philexport) president Sergio Ortiz-Luis said that they would like to get a P1-billion ESF to help the export industry.

Last year, the government allocated P1 billion for exporters but only released P200 million. This year, Ortiz-Luis said they will be happy even if the government can spare only P200 million.

The ESF can come from either the budget of the Department of Trade and Industry (DTI) or the Presidential fund. “We are trying to identify where we can source the funds but the priorities of the government now are different,” he said.

According to him, exports are a big source of income and employment but the sector gets very little support from the government.

The government has proposed a revolving, self-sustaining fund for exporters to replace the P1-billion emergency export support fund that was released last year.

Trade Undersecretary Cristino L. Panlilio said that because the export support fund is dwindling with only P22 million left, there is a need to create another fund to help exporters deal with the crisis. Panlilio is also the managing head of the Board of Investments (BOI).

Panlilio said that the revolving fund can be replenished every two years. He noted that the amount to be borrowed by the exporters can be merit and success based. When asked if this will benefit larger exporters more than the small and medium sized ones, Panlilio said there will be allotment for small, medium and large exporters.

“This will be performance and success based so that there is instant rewarding for firms that are able to perform well,” Panlilio said.

Further, he said that legislation can be passed implementing a levy on highly successful exporters who received help from the fund. This can make the fund self-sustaining because the big exporters who benefitted from the fund can make contributions to the fund as part of their corporate social responsibility (CSR).

Another means of making the fund self-sustaining is by providing zero cost loans to export firms. This could provide working capital at zero cost to the firm.

“We have to start moving away from the emergency fund and instead develop a continuing export development fund that is self-sustaining or replenishable,” Panlilio said.