Export sector hopes P.Noy retains support aid fund

CEBU, Philippines – While the current government is busy getting rid of existing programs of the past administration, the export sector is hoping that the Aquino-led government will retain the Export Support Fund (ESF).

Export Development Council (EDC) private sector representative and former Philexport-Cebu president Allan Suarez said that the advocacy in this concern will be released soon to convince P.Noy to sustain the ESF.

ESF is a special assistance program implemented by the past administration to help the Philippine export industry cope with the effects of the global financial crisis.

According to Suarez, the program is facing a threat of discontinuation as the present administration believes that the export sector in the country is performing well, based on the all-time-high growth achieved by the sector in the last few months.

However, Suarez said EDC, together with other export-related organizations, especially in Cebu will contradict this assumption by convincing President Benigno Aquino III that majority of the exporters can hardly breathe because of the external challenges, including the volatile foreign exchange.

Suarez explained that what made the export sector in the Philippines grew in the last few months, compared to its performance a year ago, is because of the improving and recovering market of export products made inside the economic zones, including BPO (Business Process Outsourcing) jobs.

Other export subsectors on the other hand, are still suffering, especially in Cebu, where most exporters are using indigenous materials, and hit by the suffocating competition in the global market.

"They [new administration] need more understanding how export is doing in this part of the country [Cebu, and Southern Philippines]. There should be a proper dialogue to find out what are the current concerns of the exporters nationwide, not only looking at the performance of companies inside the economic zones," Suarez said in an interview.

Suarez said EDC will initiate the advocacy to convince the PNoy administration to continue the ESF.

At present, Suarez said the export sector is talking and informally discussing about this, and may soon formulate a formal request to be submitted to the Office of the President.

In late 2008, following the collapse of the US financial system that led to the global economic crisis, former President Gloria Arroyo approved a P1 billion Export Support Fund (ESF) as the entire export sector reeled from cancelled orders and bleak prospects ahead.

Suarez said the situation still continues up until today, although some exporters are observing slight improvement of orders already.

The fund was established to help exporters to promote their products and build capacity in order for them to be competitive in the global market that have shrunk considerably.

ESF has two components: export development and export promotions. Export development activities eligible for the grant are capacity building; establishment of common service facilities; product design, development and innovation market/competitive intelligence; and benchmarking and enhancement of export competitiveness.

Outbound and business matching, trade fairs and exhibitions, electronic-marketing, export advertising, non-traditional marketing communications and country image building and branding projects aimed to market Philippine products abroad.

In Cebu, there are a number of export organizations that have benefited in this program, such as the Cebu Furniture Industries Foundation, Gifts, Toys and Housewares Exporters Association, among others. (FREEMAN)