But recovery unlikely to happen soon export sector sees good prospects this year

CEBU, Philippines -  While the export sector expects a slight improvement come 2014, recovery is unlikely to happen in the early months of the year as the supply chain system has yet to recuperate from the natural disasters that hit most parts of the Visayas in the latter part of 2013.

Keeping their fingers crossed, most of the exporters expect 2014 to be a "thrilling year" for the industry considering the varied issues and concerns that industry players are bound to face.

PhilExport-Cebu Executive Director Fred Escalona said that Bohol, Leyte, as well as the northern part of Cebu are three of the largest raw material suppliers of Cebu exporters. The two big calamities that hit these areas are also affecting the export sector.

"There will be pressures in the first quarter of 2014. Exporters will be dealing with additional logistic cost," said Escalona.

Leyte, he said is one of the largest raw material suppliers for coconut products, which the export sector uses for furniture, fashion accessories, gifts and housewares, and home accents.

He added that although exporters seemed to have gotten immune to hard times, 2014 is giving them another reason to be cautious. Escalona, however said that there is a high probability for recovery in the succeeding quarters of the year, citing Germany's positive recovery track.

According to Escalona, the improvement of Germany's economy signals growth for exporters' major markets in Europe.

At present though, PhilExport-Cebu is also helping the engineering and metal, food ingredients and tourism sectors to avail of the P150 million grant from the Dutch government, through the Center for the Promotion of Imports from Developing Countries or CBI-Netherlands.

He said that the grant will be distributed equally in the three selected sectors, and that CBI-Netherlands, and PhilExport-Cebu will lead the selection of the company beneficiaries from across the Philippines.

Initially, there are already 12 pre-selected firms under the food ingredients sector, seven from engineering and metal industry, while ongoing selection is still being done for the tourism sector.

In Cebu, three firms in the engineering and metal sector are now being pre-selected, said Escalona.

This latest program to be implemented in 2014, targets to get 15 companies to get technical support from the CBI-Netherlands, including consultancy, development and business support, among others.

Escalona said although this program is intended to help a total of 45 companies, (15 each sectors) nationwide, PhilExport-Cebu is commissioned to lead this new program.

He said these sectors need to get technical help from the European experts, considering that the quality system in the European Union is high, and that exporters need to understand the standard of the market.

Part of the program's component, is to find these beneficiary companies the right company buyers from Europe, through a matching system basing on the database of CBI-Netherlands.

Qualified companies are those that employ not more than 50 employees, and must be wholly-owned by Filipinos.

CBI-Netherlands has been supporting the export sector through its partnership with PhilExport-Cebu since 2006, and had already given an average of half a billion pesos in grant to the sector, said Escalona.

CBI-Netherlands, or the Center for the Promotion of Imports from developing countries, is an agency of the Netherlands Ministry of Foreign Affairs. Established in 1971 in order to support producers/ exporters to get foothold in the Netherlands market, support to Business Support organizations in improving their capabilities and to act as a matchmaker between suppliers and buyers.

In 1991, the activities were expanded to EU and since 1998 it has become an Agency.

While some export sub-sectors are still battling with the continued slowdown of market interest, Escalona said PhilExport-Cebu is helping other exportindustries such as metals, food ingredient exports, to take advantage of the strong demand specifically from the European market.

Likewise, exporters are also closely watching the movement of foreign exchange by next year, and the change-over of the US Central Bank.

The US' QE (Quantitative Easing) which is now on the level three, could also have great effects to Philippine exports, and the value of Peso to the dollar.

According to Escalona, exporters could breathe a little bit if peso will settle at P44 per one US dollar. However, even if the right foreign exchange for exporters will happen during the year, "what is most important still is the size of the market."

Escalona said growth of market size is too uncertain, there is no clearer outlook for the anticipated recovery, thus 2014 is another "thrilling" year for the export sector. /JOB (FREEMAN)