Curbing reliance on US deemed bad for exports

The United States undeniably remains to be the “bread and butter” for Philippine exports and curtailing the industry’s reliance to the US market will do more harm than good and will further cripple the dollar-earning industry.

Economists recently encouraged the export industry to cut back its reliance on the US market for the next two years.

"Even the protectionist attitude advocated by the Obama presidency is scary. Although we understand that the US economy is on the setback due to the crisis, it will be a nail in the coffin for exporters if Philippines will reduce reliance on exports," said PhilExport-Cebu in a statement.

PhilExport-Cebu executive director Fred Escalona said that this recommendation from the credible economists will further dampen the recovery outlook of Filipino exporters on the US market.

In a report released by the Asian Development Bank Institute head Masahiro Kawai, he said that the slowdown means Asian economies have to rethink the old model of "Asians make it, Americans buy it" and start promoting more domestic consumption.

While Kawai still believes that Asia must remain the "factory of the world", he urged more Asians to consume and spend more.

Escalona, on the other hand, admitted that the domestic market has grown to be a potentially growing market even for the Cebu-based exporters, noting an upward interest of local clients such as hotels, resorts, restaurants, luxury homes, among others.

However, export players said that the domestic market has yet to be considered as "savior" in these times of depleting consumer demand abroad.

"I say we must not give up. The crisis is a call for more exporters and manufacturers to remain strong and efficient," he said adding that the export sector is undergoing a weeding out period—with structurally weak companies closing down and only those that have weathered the storm remains operating.

PhilExport-Cebu, the umbrella organization of the exporting industries, reported a drop of its membership, as some 28 member-companies have not renewed their membership, while adopting the "wait and see" attitude.

Most of these companies, which do not renew their membership with the organization are micro, and cottage type industries, generally from the fashion accessories sector.

Given this very volatile scenario of the Philippine exports, Escalona reiterated his call for Cebuano exporters to strengthen efforts in diversifying their markets and re-tool marketing campaign to expand market penetration and attract prospective buyers from non-US countries such as Middle East, Africa, and Europe.

Earlier, Federation of Philippine Industries president Jesus Arranza said in a report that local industries would like to push the inclusion of the "Buy Filipino" campaign in the stimulus plan of the government, particularly now that some industries in the US move to adopt "Buy American" attitude.