Selling Philippines

She was an unconventional choice. When President Arroyo selected Felicidad V. Tan-Co to lead the Center for International Trade Expositions and Missions (CITEM) at the tail end of November last year, the appointment was met with some consternation. Philippine export sales, never particularly robust, were especially anemic after the 9/11 terrorist attacks. As CITEM Executive Director, Tan-Co was expected to apply the tourniquet, stop the bleeding, and nurse the country’s export industry back to health. It seemed a lot to ask of the young mother of three with no previous experience in the export business. So far, the appointment has proven to be an inspired one.

Credit must be given to the prescience of Department of Trade and Industry Undersecretary Dr. Thomas Aquino. Aquino was one of Tan-Co’s professors at the University of Asia and the Pacific, where she received her Masters in Business Economics in 1998. The teacher was convinced Tan-Co would be the ideal successor to Eli Pinto-Mansor, CITEM’s Executive Director for more than a decade. His pupil was not nearly as confident.

CITEM is a government trade promotions agency under the dti mandated primarily to develop and manage international trade fairs, special exhibits, and trade missions here and abroad. It provides assistance in matching buyers with exporters to foster the growth of emerging export industries. In reality, the staff at CITEM plays various roles: cheerleader to diffident exporters, coach to confounded entrepreneurs, heckler to the complacent, sounding board for creative minds, and policeman to manufacturing slackers.

The traditional barometer of CITEM’s success has long been the performance of the Manila F.A.M.E. International (MFi), its biannual furniture, gifts, holiday decors, and houseware trade fair. (MFi opens tomorrow at the World Trade Center in Pasay City, focusing on a "d+q" or "design + quality" theme. It is open to trade buyers from October 21 to 23, and to the general public on October 24.) MFi posted total negotiated sales of $57 million during its four-day run last April, a 32 percent increase from last November but still 14 percent down from pre-9/11 levels.

The disastrous aftermath of 9/11 cannot be exaggerated. One veteran MFi exhibitor folded up operations after five of his buyers were killed in the terrorist attacks, three of them perished inside American Airlines Flight 11; the other two died inside the World Trade Center where they held office. The subsequent decline in export orders was less dramatic but just as devastating.

Still, Tan-Co points out that the MFi is merely a small part of CITEM’s yearly calendar, which is filled with some 30 projects. "There are no better creative talents in the world than Filipinos. I want to erase the misconception that CITEM is only about houseware, Christmas decor and furniture. We have graduated from that. That’s one of my goals–to give equal attention to food, the fastest growing industry. Infor-mation technology, too," she says.

CITEM will hold the Asian Ethnic Food Fest in November, with over 100 exhibitors from among the country’s leading food corporations and allied industries participating. New products, brand development seminars, cooking competitions and other activities have been lined up. A Garden and Pets Show will be held simultaneously.

Upon closer inspection, the 38-year old Tan-Co appears uniquely suited to shepherd our export companies in the new millennium. She possesses the eye and discipline of a painter–the Bachelor of Fine Arts graduate from Holy Spirit has already mounted three one-woman exhibits.

"The painting was just a hobby–I figured out early on that I couldn’t make a living out of it. After the third show, I didn’t want to harass my friends into buying my paintings. I was counting how many friends I had and decided that I should stop painting for a while!"

She then spent 13 years working as a business journalist and editor for various publications. In 1992, Tan-Co received the Business Journalism Award from the Economic Journalists Association of the Philippines for exemplary reporting on trade and industry issues.

Crucially, Tan-Co was also a web content developer and has worked on websites for BusinessWorld, the Philippine Press Institute, the Makati Business Club, and the Konrad Adenauer Foundation. In an age where Net surfers quickly lose interest when a site is not equipped with a Macromedia Flash introduction, the slow-loading and dour CITEM website (www.CITEM.com.ph) is in dreadful need of an overhaul.

Tan-Co, in her first official meeting with dti Secretary Mar Roxas, detailed her plans to redevelop the website to make it more dynamic and searchable for exporters and buyers. She intends to make the website multi-lingual for the convenience of non-English speaking-patrons. The website will be a source of relevant information such as market and industry developments, for both local exporters and for foreign buyers who wish to do business with them. If the bandwidth permits it, Tan-Co would like the site to include video streaming.

Sufficiently impressed, Sec. Roxas has commissioned her to work on the dti website as well. "Me and my big mouth! That’s one of the perils of opening your mouth during meetings," she jokes.

For a relative babe in the political woods, Tan-Co has exercised commendable diplomacy. The redoubtable Pinto-Mansor’s footsteps still echo inside the cavernous CITEM office just off Roxas Boulevard and loyalties were not easily secured. Tan-Co inherited projects; she has allowed them to run their natural course. Soon enough, though, the new boss’s spontaneous charm and willingness to listen endeared her to the CITEM staff. She has kind words for the 180 employees under her as well.

"I was surprised! You have a certain impression of government and mine has totally changed. Here in CITEM, we work 12 hours a day–it’s not the 9-4 thing you usually expect of government people. 12 hours here is routine. For the middle and upper management employees, there is no overtime pay. When you visit the office at 8 p.m., especially when there’s a project going on, they are all still here! Some stay until midnight."

Tasked by Sec. Roxas with increasing CITEM’s efficiency, Tan-Co has employed systematic processes. The courtship of potential buyers originates from trade attachés, who identify purchasers from large department stores and trading companies. After this initial contact, CITEM sends them brochures and entices them to visit local trade fairs by offering to pay for their hotel accommodations (if budget allows).

"Planning (for exhibits) is a year in advance," says Tan-Co. "CITEM has the reputation of being an expert in exhibition design and management. We have perfected it in a way where it’s almost automatic. But we go beyond the setting up of the exhibition. There’s a lot of strategy about the market. In the Middle East, for example, we study how many Filipinos we have there. What are their habits? How do they buy their food? What is available there? We have to study the supply chain."

No detail is too minute. She cites the American experience: "In the US, our food products are not in the mainstream supermarkets. We try to find out why–small things like a different bar-coding system. We want to be sure that when we go wherever, it’s a success because we are spending so much public funds. We also follow up after the show to make sure our exporters maintain good relations with their suppliers."

Today, CITEM is faced with many problems. Compared, for example, to the Hong Kong trade fair, which has a gross site area of about 30,000 square meters, CITEM can avail of just 8,000 square meters at the World Trade Center. Many capable exhibitors are turned away simply because there is not enough space. CITEM’s budget covers just half of its expenses–the rest must be generated from income derived from exhibitors. There is the chronic fear that Chinese manufacturers will copy Filipino designs and produce it more cheaply. The small-scale manufacturing processes of our exporters do not possess the necessary economies of scale.

"In the last show, there were orders for two containers of wine that couldn’t be met because they didn’t have the bottles yet," she says in dismay. "In houseware, for example, very few companies invest in machines. When customers ask for volume, our companies cannot deliver. There is no efficiency in terms of production. What we have to do is find out what markets we can actually deliver to because we lose the lower end of the market to Thailand and Malaysia. Among other things, their electric rates are lower. We have to go high end."

For all our exporting anxieties, Tan-Co is upbeat. Food, she says, is one bright spot. "We have so much variety of food that we can promote abroad, especially with so many overseas Filipinos. It’s a market ready to be tapped. The organic industry, for example, is an $8-billion industry. Value added is about 100 percent greater than in non-organic foods."

Information Technology is another dollar earner. "For a lot of people, IT is kind of vague. For us, it means services. We are promoting animation and backroom operations. Procter & Gamble has their biggest Asian backroom operations here to handle financials, accounting, HRD–those sort of things. Then there is design engineering. A lot of Japanese companies have design engineering services here in the Philippines. When they bid for projects in the UK and the US, the ones really working on these projects are Filipinos. We can be very proud of this. This is where we stand out."

Our exporters, she enthuses, are becoming more Internet savvy, with many using b2b facilities. Part of Tan-Co’s action plans includes coordinating with the Philippine Trade Training Center of dti and other IT training institutions for e-commerce training.

Already, CITEM is setting its sights on the huge China market with a solo exhibition in Shanghai in March 2003. "Ties that Bind" at the Shanghai Exhibition Center will "showcase Filipino ingenuity and artistry through food, fashion, jewelry, furniture, gift items, food and beverages as well as Filipino skills in business and management, web design and development, English tutorial and fashion, interior and architectural design services". That’s laying out practically everything the country has to offer before a market which imported over $200-billion worth of goods and services in 2001, which grew seven percent in the midst of a world recession and which is poised to open markets and lower tariffs following membership in the World Trade Organization (wto).

"We want to expand our market base for exports. We don’t want to rely on just the traditional American and European markets. Our feeling is that if these economies fall, then we fall with them. In the upcoming Shanghai Fair, we’ll be subsidizing 90 percent of the cost.

"We know China’s a new market for a lot of people and it is also a competitor for many of our suppliers. China is a market with 1.3 billion people–it’s not easy nor is it prudent to ignore that. In this era of globalization, you shouldn’t be in the Philippines living in a vacuum. A lot of our staff has traveled to Shanghai to examine the market and to study how we can sell there."

It is a plunge, she insists, Filipino exporters must take. The Philippines already has the finest creative talents in the world. Fely Tan-Co is willing to bet that a little fortitude and a whole lot of homework will ensure the rest of the world experiences our country’s genius for design. For our global entrepreneurs, it’s a daunting mission made easier because the dedicated people of CITEM will join them through every league of their stormy expedition.