Fears of US slump cast gloom over export sector

Even as the export industry is now starting to develop new markets outside the United States, it is still expecting a tough year ahead as the rest of the world will be equally affected by the weakening of the US economy.

Economist Nicholas Kwan warned that export players should be more cautious this year, and be prepared for further market downtrend in all parts of the world, including Europe, Middle East, and other continents.

Kwan, who is the regional head of research for Standard Chartered Bank, said that the export sector will be badly hit this year, and that players should be prepared in sustaining their businesses, and that good management shields should be implemented very carefully.

Even if the export sector is looking at non-US continents like Europe, he said the Philippines’ export sector will be badly hit by the competition, while the entire globe will be affected by the US recession.

Filipino economist Rolando R. Avante, echoed the same projection, saying the export sector will continue to suffer this year, and it has to be prepared to fight and survive further difficulties.

On the other hand, in a separate interview with PhilExport-Cebu president Jay Yuvallos, he said that exporters are now checking up its business models, and will implement changes in the way the export sector is operating.

Yuvallos admitted that this year will be another difficult year for the already battered industry, however, players are resolved to “hold-on” amid the discouraging situation for the export sector.

“Life goes on for export sector. It can’t go to halt. We are already immune to the ‘survival of the fittest’ situation even before the peso went further down to P40,” Yuvallos told The Freeman in an interview.

“It’s not surprising that when America sneezes, the world will get the effect of it. The issue is how much effect does it have on export market [outside of US],” Yuvallos said.

This time, exporters are adopting a very conservative management operation, as well as market identification strategy. Some are even doing check and balance for their business models in order to survive the lingering crisis in the export sector, Yuvallos said.

Kwan, said that export sector in the Philippines should also be stronger enough to beat harder competition, as its not only the Philippines that are looking at other markets, but the entire exporting countries, like Vietnam, China, and India.

In Asia, these three countries are expected to lead the growth, amid the US recession. Vietnam for instance is performing very well in their export sector, with double-digit growth.

But, according to Yuvallos, Filipino exporters, especially Cebuanos have strong fighting spirit to withstand any crisis, and confident of the sector’s sustainability, while players are striving to be the best in their respective product niche.