Exports to withstand lost orders over non-compliance issues – DTI

MANILA, Philippines — Philippine exports are seen likely to withstand a minor blow caused by orders being lost to neighboring countries due to some local manufacturers’ alleged non-compliance to certain social and ethical requirements.

Trade Secretary Ramon Lopez assured that big Philippine factories are compliant to the social and ethical requirements as required by foreign buyers, and problems of non-compliance are mostly on small and medium enterprises (SMEs).

“The good news is that from the export perspective using data from the Philippine Statistics Authority, the Philippines export trajectory from January to August this year showed a 13.3 percent growth compared to negative growth last year,” Lopez told The STAR. 

“Objectively, DTI continues to provide a menu of the assistance designed to enhance the innovativeness and competitiveness of exporters. The goal is to sustain the growth of exports and there will always be continuing improvement program in which exporters and government can take concrete action on,” the trade chief added. 

Foreign Buyers Association of the Philippines (FOBAP) chair Robert Young, in a report to the Philippine Exporters Confederation Inc., said many buyers keen to source from the Philippines are instead going to other ASEAN countries because Filipino factories are still mostly not compliant.  

Young cited Cambodia and Vietnam as markets where foreign buyers are mostly going to in search of products to replace Philippine orders which are being rejected due to non-compliance by many Filipino factories. 

FOBAP said an ethical or socially compliant factory is one that maintains “lawful, safe, and respectful working conditions” and runs operations “with no negative impact on the environment.”

It is a work environment that “respects human rights with regards to fair wages and benefits, equal opportunities, is free from drugs and health hazards, and is safe and free of any kind or form of discrimination, physical abuse, or use of child labor,” added the group.

Young said compliance presents huge challenges for SMEs and therefore called on the government to consider ways to mitigate the cost of compliance, including through a rewards program and greater access to financing for small entrepreneurs.