Strengthening the Mindanao Exporters

Our local exporters are the country's main foreign exchange earning group next to the Overseas Filipino Workers. Each year, the country supplies the world with agro and marine products, home furnishings, merchandising, electronics, IT services, among others.

Mindanao’s total value of exports went up by 13% or posting a double-digit growth from US$338 million in first quarter of 2004 to US$382 million in first quarter of 2005. The said growth was attributed to increases in export values from Mindanao’s major export products particularly coconut oil, fresh pineapples, nickel ores and desiccated coconut.

Despite the robust figure, there are still many things to improve on, if we are to compete with our neighboring countries like Malaysia, South Korea and Japan. The export industry is keen on this, and it brought the local government units and the exporters together in the localized national export congress held in General Santos City.

There was a pre-congress that has introduced to the region the objectives of the localization effort and has led to the identification of regional concerns which the different line agencies have to respond to by submitting appropriate action plans to be implemented at specific time duration. The event focused on the issues of the priority exporting sectors which included the vegetable and fruit, resource-based sector, marine, and the Information communication and technology (ICT) sector.

Issues and Concerns

Key industry leaders have represented the region’s exporters in presenting the most pressing issues of the region. Critical issues that arose were lack of financing assistance to Small exporters; and the software piracy which is killing the ICT industry; infrastructure and telecommunications development, tariffs and taxes, and market penetration strategies.

The main issue that came up was financing, due to stringent requirements, high interest rates and lack of financial support for capital investments. This affects fruits, marine and other resource-based export sector.

Infrastructure came second, due to lack of post harvest facilities; inadequate processing and cold storage facilities; inadequate fish quality control laboratory; insufficient infrastructure and investments on telecommunications and internet cafés; limited entry of public telecomm services; and no ICT park accredited building to accommodate ICT related businesses.

Cost of doing business was also a major concern with high cost of freight charges; high cost of transportation and shipping; road blockades as landowners of private roads collect toll fees from the company trucks; and Stringent export and import documentation procedures. This affects the Fruits, Marine and aquamarine, Vegetables, other resource-based sector.

Product development and marketing were also mentioned, the challenges being: limited product concentration (need to diversify and adopt new technologies); need to improve quality; insufficient research and development programs in the region; improper post harvest. Lack of strong marketing organization or consolidator; narrow export market; weak branding or absence of brand or institutional packer for fresh and frozen tuna; lack of investment promotion and tax incentives; High Tariffs of the United States and the European Union (EU) on our canned tuna; Insufficient EU quota allocation for canned tuna; Expiry of EU TRQ regime; Implementation of EU GSP on canned tuna; Import ban on smoked tilapia in Japan.

Tuna concerns included the need to distinguish and establish the two classifications of tuna in the region, the canned and the fresh-chilled, which need to have separate rules and regulations given their difference. The Filipino tuna sector is also threatened by the foreign players who receive incentives such as tax free status while they sell to domestic market whereas the local tuna is priced with 35% tax.

On the IPO concern, several exporters were complaining on the tedious process of securing intellectual property rights from Manila and thus propose for IPO to establish a desk with the DTI offices. Exporters reported that it is often easier to patent products outside Philippines but this would not provide enough protection for them.

The insufficient support due to budget constraints of the Bureau of Fisheries was highlighted; as its budget is lumped together with the other bureaus of the Department of Agriculture. There is a need for the private sector to advocate for the BFAR to become a separate Department. BFAR was also criticized on their interpretation of the EU standards which causes the delays on the EU inspection. BFAR unfortunately was not represented in the congress.

The region also recommended for the fast tracking of the implementation of the project that would expand the Makar Wharf at Gen.Santos to enable the region to accommodate big foreign vessels and there would not be a need to bring some of their exports to Davao ports.

Secured Commitments

17 regional scorecards which includes commitments from DA, DOST, DENR, DTI, NEDA, BFAR, PCA, BOC, PPA, CHED, DEPED, DOTC, CICT, TESDA, DILG, DPWH, and NTC were secured during the open forum.

DTI plans to organize a financing forum for conduit organizations with the National Livelihood and Support Fund to facilitate access to financing thru information dissemination / forum.

To Intensify product promotion and marketing strategies DTI would spearhead the conduct of trade fairs, disseminate DTI-CITEM organized local and international trade fairs/missions, identify OFW associations to help promote and distribute region’s products, participate in national and international Food Expo (Japan and Taiwan) and conduct market dialogue/matching.

Related line agencies and TESDA would also work together at strengthening human resources of the region by way of trainings and technology demonstrations and transfer ; the use of educational mobile van to cater to remote areas.

For the ICT sector, web and data connection for internet access, and additional telephone systems would be provided to address the telecommunication development issues.

DTI and DOST would also assist in developing competitive products by tapping commercial attaches for market intelligence, providing testing/calibration services to clients and firms, and giving technical assistance like trainings.

So much work to do.. so many plans to accomplish …before we can truly make Mindanao the food basket of the Philippines .