Export sector sees no further closures

CEBU, Philippines - As the global economy starts to show upward trend, the Cebu export industry sees no more closures and retrenchments in the next few months, especially next year.

PhilExport-Cebu executive director Fred Escalona said that the industry has seen slight improvement of orders especially in the home décor sector, and hopefully it will expand to the recovery of orders to the furniture makers.

“We can feel/see the sign of improvements already because the orders have started to pick up starting with the home decors,” Escalona said.

Also, some players in the furniture sector are also experiencing a slight recovery of orders, as early as now.

“Hopefully we won’t see any closures and manpower reduction in the export sector starting this second semester,” Escalona said.

In 2008, there were a total of 75 PhilExport members from the furniture industry. About 12 companies are not renewing their membership, its either they are closing their factories or they are not just renewing their membership, he said.

Aside from home decors that is showing recovery, Escalona said the fashion accessories’ export is also improving, as the market abroad especially in the US, is starting to shop affordable products, such as fashion accessories and home decors.

This year, the Cebu export industry, primarily the home furnishing and fashion accessories sectors are growing at a rate of 10 percent to 15 percent in terms of order volumes.

He said positive performance of home decors, and fashion accessories is a good indication that the buying interest abroad is starting to pick-up. “It will start with the small and affordable products.”

In the electronic sector, he said hopefully the closure announcement of Canadian firm Celestica at the Mactan Export Zone (MEZ) will be the last one, at least for this year.

However, Escalona expressed concern on the food and processed food export’s performance following the stringent rules of importation implemented by the United States and European Union (EU).

As the crisis-battered export sector is seeing hope, other problem in food export is arising. But, Escalona said PhilExport-Cebu is doing its best to help the food exporters cope this problem.

Anytime soon the U.S. will be preparing to sign into law the proposed FDA Food Safety Modernization Act. If things turn out as expected, the new US law will take effect on January 2, 2010.

On the other hand, the European Union (EU) is also set to implement its Fishing Regulation: Catch-Certification Scheme that will cover all export of fishery products to the EU. This new EU requirement will take effect on January 1, 2010.

These new non-tariff trade barriers of the US and the EU are expected to put added pressured on the food export industry of the Philippines.

Escalona said PhilExport-Cebu is bracing up on this problem and will introduce programs that will prepare food exporters for this new stringent regulation on food exports in US and EU.