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Business

P8-billion revenue losses seen from banana exports to South Korea

Louise Maureen Simeon - The Philippine Star

MANILA, Philippines — The Philippines stands to lose about P8 billion in revenues from bananas if the government fails to scrap the 30 percent levy on the commodity.

The Pilipino Banana Growers and Exporters Association (PBGEA) warned that the country may lose South Korea as a top export destination if the government will not push for a bilateral agreement removing the 30-percent levy.

“Cheap banana imports from Central America have started to eat into the share of Philippine bananas in the Korean market and these could totally push us out of the picture by 2022 unless we get the same zero-tariff treatment as they do,” PBGEA executive director Stephen Antig said.

Data from the group showed that the Philippines may lose about P1.6 billion in annual export revenue and an additional P6.5 billion in foregone local and national tax revenues.

This is also seen to affect 32,000 workers and over 200,000 dependents in the domestic industry of their means of livelihood.

South Korea represents a market of 30 million boxes for Philippine bananas from a production area of 8,000 hectares or a total of 390,000 metric tons.

Central American countries like Costa Rica, El Salvador, Honduras, Nicaragua and Panama have signed a free trade agreement with Korea in favor of zero tariffs in the next few years.

“This is the same level of support and action that we need to ensure that our fruit exports remain competitive in the fast-expanding Asian market. We should negotiate separate bilateral deals like what the Central American countries did, so that the agreements are country-specific and not regionalized,” Antig said.

Sumifru Philippines Corp., for its part, said banana growers want a “level playing field” in competing with exporters from other countries not only in South Korea, but also in Japan and China as well.

“We are talking about protecting the banana industry and saving jobs. It would be highly ironic if we lose jobs in the banana industry which is mostly based in Mindanao when the main program of our President, who hails from this island, is job creation,” Sumifru president Paul Cuyegkeng said.

While other countries are just exporting small volumes compared with the Philippines, PBGEA believes they could easily bump off the country three years from now because Philippine bananas will be more expensive than those coming from Central America.

The group likewise emphasized that the bilateral trade between the two countries is heavily lopsided in favor of the latter.

South Korean exports to the Philippines reached $10.6 billion last year, while Philippine exports to Korea amounted to only $3.7 billion.

“This trade imbalance can be corrected if the Philippines can get more favorable terms for the country’s exports to Korea, particularly agricultural products,” Antig said.

“Beyond doubling efforts to market the country’s export products, the government must assess the benefits and disadvantages of existing free trade agreements to reverse trade imbalances with bilateral or multilateral partners,” he added.

During Duterte’s state visit last month, Agriculture Secretary Emmanuel Piñol said the South Korean government would look into the Philippines’ request for lower import duties on fresh and processed fruit exports, particularly bananas.

BANANA EXPORT PILIPINO BANANA GROWERS AND EXPORTERS ASSOCIATION
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