SME exporters say recovery not yet solid, seek govt aid

Published by rudy Date posted on April 19, 2010

DESPITE improving official export figures, the small and medium enterprise (SME) sub-sector is bucking a plan to cancel the release of money meant to help them tide over the global financial crisis and realign this amount to the government’s El Niño Calamity Fund. The Philippine Exporters Confederation Inc. (Philexport) said its Cebu chapter submitted a position paper asking the Department of Trade and Industry (DTI) to release the remaining P989 million in the Export Support Fund (ESF).

”The export sector, outside the economic zones, has not yet fully recovered from the effects of the global financial crisis” so DTI should “abandon its proposal to the Office of Budget and Management to divert the un-drawn balance of the P1-billion ESF to the El Niño Calamity Fund,” the Confederation of Philippine Exporters Foundation (Cebu) Inc. said.

Former Trade Secretary Peter Favila had said the government would instead infuse the remaining amount allocated for the ESF into efforts to mitigate the effects of the El Niño weather phenomenon.

The Cebuano exporters’ group said that “even if signs of a market recovery in the US and elsewhere are emerging . . . prominent economists have cautioned the market players about the sustainability of the recovery and advised investor prudence.”

The industry group noted that more than 40 SME exporters in Central Visayas have either shut down or suspended operations, as their sales plunged by about half.

About 150,000 workers—mostly in the subcontracting supply and value chains—in the region were retrenched because of the crisis, the group said.

“Although there is concrete proof that companies are rehiring workers, many of these workers are actually hired on short-term contracts as orders from foreign buyers are also booked on short-term basis,” it added.

Philexport said only P11.6 million of the ESF had been released.

In a telephone interview last week, Sergio Ortiz-Luis, Philexport president, said the sector still needs the ESF as the “worst is not yet over” for exporters.

“We would ask Trade Secretary Jesli Lapus to extend the distribution of the ESF,” he said.

The Joint Foreign Chambers, in a presentation last week, also recommended the establishment of an “export development fund” to boost the manufacturing sector.

Earlier, the National Statistics Office said Philippine exports grew for a fourth consecutive month in February.

Dollar receipts from the country’s merchandise shipments abroad rose 42.3 percent to $3.567 billion that month, causing the first two months’ receipts to surge 42.4 percent to $7.146 billion.

As a result of the improving export numbers, the Executive Technical Board of the inter-agency Development and Budget Coordinating Committee has recommended raising the country’s export growth target this year to between 8 percent and 10 percent from the original goal of 7 percent to 9 percent.

Last year, exports dropped 21.9 percent amid the worst global financial crisis in decades. –BEN ARNOLD O. DE VERA REPORTER, MAnila Times

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