Exporters find wage reprieve too short

CEBU, Philippines – The six-month extension given by the Regional Tripartite Wages and Productivity Board (RTWPB) to the export sector for the implementation of the P18 wage increase is seen to provide additional difficulties to the already battered sector.

“While we are grateful to RTWPB for granting the export sector a six-month extension, we believe that the industry cannot recover from the debilitating crisis in such a short time. We don’t see the recovery happening soon. As a matter of fact, many companies had to close shop and we cannot say the near future would be bright. Our major markets—the US, Europe, Japan—are still in dire straits, and these matters are beyond our control,” the Cebu Furniture Industries Foundation Inc. (CFIF) official statement in reaction to the P18 wage increase recently approved by the RTWPB.

On the other hand, CFIF said the group is still obliged to comply with the RTWPB. “There is no other way around it.”

The furniture sector further explained that its situation is aggravated by several conditions, such as rising operational cost due to increase in the prices of power, fuel and raw materials; the occurrences of power outages also drives up its operating cost because of the brownouts which damage their machines and materials, like veneer.

Also, banks still remain wary of exporters, thus their access to financing “is very narrow and at worse,--non-existent.

“With our backs pushed further against the wall, there’s nothing we can do about the thousands of workers who were displaced at the height of the crisis. We are worried about the small companies that can hardly pay for this increase. To be able to pay the new minimum wage, they might even resort to further downsizing,” the statement said.

CFIF further explained that although the exhibitors during the Cebu International Furniture and Furnishings Exhibition or CebuNext 2010 entertained a few buyers, however their visits have not been translated to actual orders, “In the end the orders that really matter.”

“We want to appeal to all workers to also increase productivity. Without any improvement in productivity, the wage increase would bring no benefit and would only cause inflation to go up,” CFIF emphasized.

The National Economic and Development Authority (NEDA-7) reported that Cebu furniture exports generated a total export value of US$19 million for the first quarter of this year.

Although, the report does not include the comparative performance of the sector in the same period of last year, the industry however, was able to average a monthly growth of 19 percent from January to March of this year.

The export value in March recorded at US$6.5 million, down by 13 percent from US$7.4 million in February but 32 percent higher compared with the US$4.9 million in January of this year.

The furniture sector is one of the largest employment generators in the export sector in Cebu, with roughly half a million people directly and indirectly dependent to the industry. (FREEMAN)