Exporters ask govt for P1-B bailout

By MARIA ALETA O. NIEVA, abs-cbnNEWS.com

Posted at Feb 24 2009 09:19 PM | Updated as of Feb 25 2009 06:44 AM

Philippine exporters during the Movement for Exports Survival press conference in Makati City

Export industry leaders on Tuesday had their hats in hand and called for a P1 billion government bailout.

“We need help...All are suffering, panicking,” Luis Sicat, chairman of the Home Accent Group of the Philippines, Inc (HAPI) said in a press conference in Makati City Tuesday. Sicat was one of the 15 leaders representing export industries facing drastic cuts in global demand.

Sicat said their export shipments already dropped by about 50 percent to 80 percent, resulting in a number firms closing shop and thousands of lay offs.

Among the handicrafts and footwear exporters, industry players have counted 126 firms in the initial tally of casualties. Displace workers have reached 3,453.

Casualties among members of the Christmas Décor Producers and Exporters Association of the Philippines (CDPEAP) are increasing on a daily basis, shared the association president Ricardo Sales.

Sales said these daily casualties are on top of the 177 association members that already closed shop in 2007, or before the global economic crisis kicked in.

Sales cited that 26,000 firms owned and managed by export-oriented entrepreneurs are "worth saving" since these employ about 1.5 million workers.

Despite efforts to downscale their manufacturing operations or retrench workers to survive, Sicat said they are faced with buyers abroad cancelling their orders, while discounts are being negotiated for the remaining ones. Sicat cited that among his peers in Cebu, around 67 percent have already closed their factories.

“We are overwhelmed because of the crisis,” he shared.

The P1-B promise

Sales stressed that there is still about $360 billion-worth demand for their products, but "“We need government’s help to survive in the coming months."
HAPI president Amaya Bengzon said that the export industry needs, among others, a P1 billion emergency relief.

“We asked the government now to set up in motion a national program to help the exporters such as other governments like the US and the European Union,” Bengzon said.

Bengzon read the group’s five stress points needed to save the ailing export industry. These are:

  • the release of the P1 billion Export Promotion Fund;
  • subsidy for international shows;
  • establishment of permanent showroom;
  • Value Added Tax exemption for exporters; and
  • easy access to export financing.

Bengzon said exporters want President Arroyo to formalize her approval of the Export Promotion Fund of P1 billion “which she verbally approved in principle in her meeting in Palanan, Nueva Ecija” last year.

Ed Zuluaga of the Chamber of Furniture Industries of the Philippines said they only want government to keep its word.

“The reason why we are here is because government is not keeping its promise. That’s all what we want them to do--to keep their promise and give us the money that they’ve promised us,” Zuluaga said.

Furthermore, exporters need government’s support in giving full subsidy for Filipino exporters’ participation in major trade shows.

“Less participation means less order, less work and less dollar remittances,” Bengzon explained.

She said there is also a need to fund effective and aggressive promotions of exporters’ activities such as the Manila FAME: PIFS: Manila NOW; Cebu X; Bijoux Cebu; and the Philippine Food Expo.

They also ask the government to establish a permanent showroom to include products from all sectors to boost sales and develop local markets.

She added that exporters are asking for an automatic deduction of the 12 percent VAT on materials and supplies needed to manufacture export products.

“In addition to the VAT exemption is the exemption of exporters from the tax paid for the power and the water consumption as well as telecommunications. The exemptions we are asking for is only good for 10 to 12 months,” she said.

Lastly, exporters urge government for an easy access to readily available export financing at concessionary rates from government financial institutions.

“We strongly believe that export can sustain a much higher average yearly growth than the projected decline of -2.9 this year if only the government would set in place the needed package that would keep the industry afloat, particularly the small, micro and medium enterprises that directly or indirectly employ nearly two million Filipinos,” the group said.

She said the government has "a responsibility to ensure that the exporters survive," just as it has a responsibility towards the OFWs and the IT corporations.