Last of the series…

If you have been following this short series on Business & Leisure’s yearender, you would have read the assessments and forecasts of top industry leaders for the export, handicrafts, plastic, meat imports, and wood industries.

On this, the last of this three-part series, we shall cover the rest of the industries, starting off with the local pork producers.

In contrast with the Meat Importers’ and Traders Association (MITA) grim assessment and grimmer forecast for 2014, our hog growers are bullish about the incoming year. “Regarding 2013, I would say it’s one of the best years for us,” according to Mr. Edwin Chen, president of ProPork. Despite the spike in meat importation which he said stood at 40 percent last year as compared to 2012, they have maintained good farmgate prices. This is because the Dept.of Agriculture (DA), and the National Meat Inspection Service (NMIS) and the Bureau of Customs have implemented stricter controls including higher reference prices for imports, stricter accreditation for importers, and the implementation of the so-called second border by the NMIS where compliance officers inspect cold storages to check on documentary requirements, including paid tariff. As a result, Mr. Chen said, importers import more industrial grade products, leaving the regular domestic pork requirements to the local producers.

The year 2014 looks good, according to ProPork, and wet market prices as well as supply are seen to be stable this year despite Yolanda which saw Metro Manila’s pork allotment diverted.

The semi-conductors and electronics industry is up next.

This erstwhile sunshine industry has not managed to pull itself out of the quagmire. They initially projected a five percent growth for 2013, but instead saw a contraction of 10 percent last year. “What happened was, in 2012 we expected to snap back and companies were building up inventory, but the recovery did not happen,” according to Mr. Dan Lachica, president of SEIPI (Semiconductors & Electronics Industries in the Phil (SEIPI). So, for 2013, the extra inventory had to be consumed in 2013, and this inventory correction explains the contraction in the industry that marked 2013. It is interesting to note that the volumes are still high, with most companies operating through the holidays, but the reality is, the prices in the world market are still depressed. The FOREX impact has not helped either.

For 2014 though, SEIPI sees positive signs for automotive electronics, though other sectors in the industry, including semi-conductors are expected to struggle through another difficult year. They hope to strengthen the manufacturing capabilities of their member-companies, especially for test and assembly in the semiconductor sector to move up the value chain, ride the wave of the growth in automotive electronics and consumer products, and expand their EMS (Electronic Manufacturing Services for particular product lines.

This industry has been the victim of its own success, and up till 2010 it has experienced steady growth, with a high of $31 billion in sales. SEIPI remains hopeful about the PEZA initiative to push for income tax holidays for this industry.

We come now to the manufacturing sector.

Mr. Jess Arranza, president of FPI (Federation of Philippine Industries) noted the “higher consciousness about manufacturing” and reported a banner year for exports of finished products. Sales of construction materials have of course topped the list of best performers in the wake of the recent calamities that have hit the country. Mr. Arranza mentioned that he wrote Sec. Ping Lacson offering the association’s help in assuring the supply  and shipment of construction materials to affected areas, with bulk discounts from their member-companies. 

This year, the construction boom is expected to continue even well into 2016.

For the country’s furniture makers, 2013 is another forgettable year. While they have hoped for a 10 percent growth, the industry realized a measly one to two percent growth only, barely skimming the mark. Even the March furniture show last year on which they pinned their hopes for a surge in sales was disappointing as well, said Mr. Nikolaas de Lange, president of the Chamber of Furniture Industries of the Philippines (CFIP).

Domestic sales though somehow made up for the dismal export figures, and this they will pursue in 2014. CFIP has vowed to have a more active role in marketing their products in talks with the Phil. Construction Association so the domestic tourist industry can give our local furniture makers a chance to prove their mettle. It is difficult to compete against China  because the economy of scale tilts towards the big volume producers. China is now the biggest producer of furniture in the world, a distinction held five years ago by Italy. Importers can bring in mass-produced and competitively-priced furniture practically duty-free, according to CFIP. Still, our furniture makers are bent on protecting their niche market for quality designs and artisan workmanship. This may not be as economically viable as the furniture industries in China, Thailand and Indonesia, but the Filipino furniture maker is now known globally for his exceptional skills and designs.

With the construction frenzy going stronger in 2014, hopes are still high for the furniture makers. In March, the Philippine International Furniture Show will be mounted and CFIP head Nikolaas de Lange looks forward to much-needed support from exhibitors to make this show a success. Foreign buyers are expected to flock to the show, and this early, the furniture factories in Cebu, Manila and Pampanga are already bustling with activity.

For this year, though, CFIP hopes to get the necessary support from government agencies concerned. The European Union is now very strict about wood products exported into their member countries.  The lumber has to be of legal origin and properly documented as such.  In the Philippines, we still do not have a documentation process.

Likewise, our furniture makers have to rely mainly on plantation wood which is not exactly ideal for furniture making. Hard wood is preferred, but they have to make do with what is available because of the log ban. They also have to rely on imported wood, but the documentation for wood importation is long, tedious and expensive. They have a long bucket list for the government, but our furniture makers are bravely fighting on.

This concludes our short series on B&L’s year ender.

Mabuhay!!! Be proud to be a Filipino.