Furniture exporters seek moratorium on Bureau of Customs rules

CEBU, Philippines - The Cebu Furniture Industries Foundation Inc. (CFIF) yesterday announced to embark on a “moratorium” bid on the strict regulations required from export companies on selling products to the local market.

“Tedious processes required by Bureau of Customs in selling to domestic market discourage us to sell to the local market,” said CFIF president Eric Casas during the formal opening of the 20th Cebu International and Furnishings Exhibition Show or CebuX 2009 yesterday.

Casas, together with some industry officials had informal discussion with the Department of Trade and Industry (DTI) officials to help them pursue this move, as the domestic market had been considered as one of the industry’s saviors, while the global market demand has slackened.

About 20 percent of the furniture industry in Cebu is locked with the strict laws and regulations required by the BoC, in selling to the domestic market, because they are also availing of special incentives offered by BoC for bonded warehouse exporters, most of them are big companies.

According to Casas, CFIF will seek the help from the PhilExport, to help them lobby this concern, of which amendment of some particular laws and rules in the BoC can easily be changed through an Executive Order (EO).

PhilExport, being the most influential export organization in the country, is expected to help CFIF in pushing this special request from the furniture makers, which are now experiencing ‘the worst” in history.

“We need an EO intervention as soon as possible,” Casas said. Although some companies are now able to sell their products easily to the growing domestic market, other big companies cannot because of the existing BoC regulations.

Export bonded warehouses are giving special privileges such as importation incentives, among others. This time, while the domestic market is becoming an important market for the exporters, Casas said a “moratorium” is immediately needed.

Some exporters have started to penetrate the domestic market, starting with institutional clients, like resorts, hotels, restaurants, and luxurious condominiums and subdivisions.

To some furniture makers that do not need to comply with BoC rules, domestic market contributed about 20 percent of their total sales during the last few years.

Meanwhile, the Department of Tourism (DOT) offered a sustainable support to the industry, aside from its P2 million financial support given for the first in this year’s show.

In a press conference yesterday, following the formal opening ceremony, DOT secretary Joseph Ace Durano announced that DOT and CFIF will be working together to formulate a program that will promote the furniture industry in Cebu in a all-year-round basis.

Just like the support extended by DOT to the real estate industry in the Philippines, to bring in investor-tourists to Philippines. This time, DOT will also bring in furniture buyers from all over the world in a form of “familiarization trip” to promote tourism and furniture industry in Cebu in one.

Part of the plan, is to include Cebu’s branding as the “Design Destination in Asia” in all tourism-related promotions abroad. In this way, DOT will not only help spur tourism for the province, but also helping the “barely-breathing” furniture export trade.

Cebu contributes 60 percent of the US$300 million worth furniture exports value of the Philippines.

Furniture makers described the years 2008 and 2009 terrible years for the industry, “it doesn’t get worst than this,” said Charles Streegan, CFIF vice president, and owner of one of the largest furniture exporters in Cebu, Pacific Traders.

However, although “terrible” it also provides a sober realization for furniture exporters whether to continue with the business or “call it quits.”

The 20th CebuX yesterday opened with the smallest number of exhibitors in the last few years with 55 participants, a 30 percent down from CebuX 2008.