Losing my re(li)gion: Agri-exporters pessimistic with ASEAN regional integration

Aug. 02, 2013

Davao Today

Davao City – Businessmen attending the 1st Mindanao Exporters Congress (MEC) said they are not ready to compete with cheap fruit imports once tariffs and trade restrictions set in during the ASEAN economic integration in 2015.

Speaking at the MEC held at SMX Convention Center in SM Lanang, this city, Philippine Export Confederation (PHILEXPORT) national president Sergio Ortiz-Luis Jr. said Mindanao’s edge in agri-business will be affected and local farmers will lose out in the process.

“For example, the lanzones (fruit) from Camiguin will lose out to cheaper lanzones coming from Malaysia. We can’t compete with that,” he said.

The ASEAN economic integration meant the assimilation of ten members of the Association of Southeast Asian Nations (ASEAN) – Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei, Myanmar, Cambodia, Laos and Vietnam – into a single market economy in 2015.

“We are not ready,” said Senen Peranda, Executive Director of Export Development Council and director of Department of Trade and Industry’s Bureau of Export Trade Promotion.

Peranda said that with 18 months left before ASEAN economic integration, the government is still doing the proper groundwork especially for the agribusiness industries in Mindanao, such as placing the infrastructure for irrigation, farm-to-market roads, and genetic intervention for crop-growing.

Mindanao is the country’s main source of food and agribusiness products, contributing 60% of the country’s agricultural exports worth 130-billion pesos (US$ 3B), according to Mindanao Development Authority.

Domingo Ang, chair of PHILEXPORT region 11 said the MEC wants to consolidate all export players in the island to demand government support.

“What we want now is to consolidate ourselves into one big group. Now is the time,” he said.

Ang is, however, worried that the country’s top export which is coconut oil will lose out to Malaysia’s cheaper palm oil in the world market. “Just imagine the day palm oil will replace coconut oil. Malaysia has the cheapest palm oil, so what will happen to us?”

The Philippines is the world’s top producer of coconut oil contributing about 28% of the country’s agri-business exports last year.

Meanwhile, the PHILEXPORT wants the government to provide an export development fund to help the export sector.

Ortiz-Luis complained that government agencies gave “almost nothing” to the export players in the past.

“The Department of Trade and Industry gets 2.9 billion pesos yearly, and allocates 500 million pesos for international trade section.” But he said most of this goes to the salaries of the bureau and leaves only little for its intended purpose.

Government’s subsidy is needed, said PHILEXPORT 11 president Ferdinand Marañon, to fund expenses like travel “so that we can see for ourselves and be aware of the opportunities out there.”

The group also proposed Congress to amend the Cabotage Law, which restricts foreign vessels from loading domestic cargoes and passengers. The practice has put local traders at a disadvantage, said exporters, as local shipping charges high costs of transporting goods.

Peranda also noted that with the ASEAN integration, exporters need to step up and diversify agri-products such as producing banana or coconut flour, tuna sausages, and micro-wave ready banana.

Ang said the bottom line is to make the export industry competitive.

The ASEAN community has a population of 608 million people from the ten member states, contributing to world exports worth US$ 1,240 billion and intra-ASEAN trade worth US$ 273 billion according to figures from the International Monetary Fund.

Next week, another gathering of business leaders for the 22nd Mindanao Business Conference will also tackle concerns regarding the ASEAN integration. President Benigno Aquino III is expected to arrive and discuss policy issues regarding the integration. (Tyrone A. Velez, davaotoday.com)

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