Handicraft exporters are set to book better-than-expected sales this year on sustained shipments to the United States despite the global economic downturn, according to the Philippine Chamber of Handicraft Industries Inc. (PCHI).
“We’ve already surpassed the growth target of 10 percent,” PCHI president Dennis A. Orlina told reporters on the sidelines of the Manila FAME exhibition at the SMX Convention Center.
Handicraft exports may reach about $100 million or an increase of 11 percent from $90 million in 2011, he said.
Orlina explained that Philippine exporters were still enjoying robust demand from US firms, including retail giant Walmart Stores Inc.
He said affordable yet good-quality Philippine products were competitive especially considering the rising production costs in traditional export sources.
While production is becoming expensive in competitor countries like China, Philippine companies are continuously trying to bring down costs, Orlina said.
More handicraft companies are relocating to the provinces as the rising cost of doing business in Metro Manila causes them to lose their competitive edge, according to PCHI.
PCHI said that bringing business operations to the provinces could be a practical alternative, as they expected to reduce their operation cost by as much as 20 percent. Orlina said some of Manila companies were transferring to Cottage Industry Technology Center (CITC) areas in the provinces.
The CITC is a line agency of the Department Trade and Industry (DTI) that provides production-related training and technical assistance to furniture, gifts and housewares, fine jewelry and leather footwear industries all over the country.
The Philippine Economic Zone Authority (Peza) recently approved CITC’s accreditation as a special export processing zone, according to PCHI. An enterprise registered with Peza and operating within a Peza zone gets to enjoy certain tax incentives.
“We can encourage local producers to be exporters, we can now train especially our members who are just producing and not exporting,” Orlina said.
By relocating in the provinces, handicraft business owners can also be more involved with farmers and other players in the supply chain. To mitigate the impact of high electricity cost on their operations, Orlina said some firms were embarking on a project using bamboo as an alternative fuel.