CEBU, Philippines - The National Economic and Development Authority (NEDA-7) expects exports in Cebu to rebound starting 2010, and urged players to prepare for the upswing.
“In the early part of 2010, expect the export industry to continue gearing up for the rebound. The crisis has given many exporters in the region an opportunity to evaluate and assess their businesses so they could better prepare for the upswing,” said NEDA-7 regional director Marlene Rodriguez.
Rodriguez noted that as early as the second quarter in 2009, industry players have seen signs of improvement of orders in some of the export sectors particularly in home décor and furniture.
Rodriguez hopes that because of the rebound, exporters will start to rehire the 33,059 workers who have been affected by the weakening of the global market, starting 2010.
Of the total 33,059 workers affected by the weak orders, 16 percent of which are affected by temporary shutdown, thus once market will start to perk up, these workers will soon get back their jobs.
For his part, PhilExport-Cebu executive director Fred Escalona said the sector still foresees “cautious” recovery next year, as the economic recovery in the United States still do not translate to growth in employment, and large segment of consumer base in the US still having financial challenges.
“A lot of people in the US still do not have jobs. Purchasing power still is not as dynamic as before. Our products are mostly consumer based like furniture, home furnishing, fashion accessories, these products are one of the least priorities when there are financial difficulties,” Escalona said.
Besides, he said people in the United States, as well as other markets like Europe are still on a “traumatic” state, thus when it comes to buying food products and other commodities, they prefer to buy locally manufactured over imported products.
However, Escalona said some exporters have already announced improved orders in the last few months, but figures still on the negative level.
National export figure from January to July of this year showed a 33 percent plunged in export performance from total export volume of US$30.06 million in 2008 the figure went down by 31.69 percent in the same period this year to US$20.533 million.
All export commodities registered negative performance in the first seven months of this year, except for fine jewelry, fruits and vegetables, and tuna exports.
Data recently released by the Export Development Council (EDC) showed that fine jewelry export went up by 9.41 percent, fruit and vegetable exports improved by only 1.51 percent, and tuna export up by 6.57 percent.
Other export commodities, such as furniture, home furnishing, garments, semi-conductors, marine products and carrageenan, machinery and transport, electronic products, among others registered negative performance.
In the last two months (August and September) figures still continued to post negative trend, Escalona said this may continue in the first few months of 2010.
He said a good indicator of export sector to expect a full recovery is when the employment rate in the United States will improve and many people will get back their jobs already.
Exporters consider the year 2009 as the worst year in the industry’s history. While others had to shut down their plants due to unprofitable business, others instead invested on marketing research, innovation, to strengthen their organizations preparing for the recovery.