Local firms urged to participate in global value chains

MANILA, Philippines - Filipino exporters are encouraged to sustain their participation in global value chains and production networks in order to reap the bounties of the ASEAN integration process come 2015.

Donald Dee, vice chairman of the Philippine Chamber of Commerce and Industry (PCCI), said benchmarking to develop complementary initiatives supporting ASEAN’s global production network is imperative.

“The integration process and our future free trade agreements will only be beneficial on our part if we work together to put our house in order,” he said.

Apart from such initiative, Dee underscored the need for the country to strengthen regulatory frameworks to support competition and competitiveness, as well as prioritize measures related to investment promotion and trade and transport facilitation.  

He said exporters should improve their overall competitiveness and growth especially in identified ASEAN priority sectors.

These sectors are information technology, fisheries, manufacturing, electronics, air travel, agriculture, logistics, tourism and wood-based.

Har Man Ahmad, Trade Commissioner of Malaysia External Trade Development Corp. (MATRADE), said ASEAN countries, including the Philippines, can adopt a holistic approach towards ASEAN economic community.

“It is not really about developing the market alone, the capabilities (but also) developing the (firms’) financial capabilities, the sense of readiness and expertise...Not only within the SMEs (small and medium enterprises) alone, it is more of developing the channel of distribution as well,” he said.  

As seizing markets abroad is a difficult one, Ahmad said that exporters need to take into account countries of destinations for their products, how these operate, the margin of profit and whether they will increase market penetration.

“Because we are talking about sustainable business into certain countries. It is not about hit-and-run kind of activities, selling (otherwise) the business won’t grow,” he added.

Ahmad also stressed the important role of the government, noting “you cannot expect exporters to develop the markets by themselves, a bit of involvement from the government is very much important to further develop the industries.”

For his part, Philexport president Sergio Ortiz-Luis Jr. identified Asia, particularly ASEAN, as a lucrative market for the local exporters owing to the region’s growing middle class consumption power.

Statistics show that Philippine goods exported to ASEAN, comprised of 17.3 percent to total exports in October this year, rose 35.1 percent from the same month last year.

Exports to East Asia accounted for over 50 percent during the same month, while the United States only accounted for a 14-percent share.