Furniture makers blame government for its decline

The furniture industry is blaming the Philippine government for its declining hold in the world market.

"The government made furniture export industry uncompetitive. It [government] has become more obstructive, than supportive," said Cebu Furniture Industry Foundation Inc. (CFIF) vice president Eric Cass referring to the worsening bureaucracy in the government, among other hurdles in exporting the furniture products to other countries.

In the last six years from 2000 to 2005, the Philippines had a negative growth rate of five percent while the rest of its Asian neighbors are experiencing positive growth rates.

If it were not for the international grants given to the industry members, Cebu's furniture exports would have been drowned further to the bottom, overtaken by competitors like Vietnam and China.

"Foreign governments like the CIDA [Canadian International Development Agency] Pearl; Dutch government and EU Asian Invest are helping us," CFIF executive director Ruby Salutan said.

In the past, the Philippine furniture export was ranked top 11 out of all furniture exporting countries in the world. Today, the ccountry's furniture exports , 70 percent of which come from Cebu, fell down to 36th place.

Despite its huge potential, the Philippines has only captured .35 percent of the total furniture market in the world.

"Although the market potential is huge, we are constraint to expand our wings in sustaining and increasing our market share because of too many problems here, especially the government's monstrous bureaucracy" said CFIF president Michael Basubas.

The declining trend in the Philippine furniture export performance can be attributed to several factors such as fierce competition from China, Vietnam, and other Asian neighbors; lack of government support to the industry in terms of unfriendly trade policies and inconsistent implementation of government regulations.

Another factor for the industry's drowning performance is the lack of adequate capitalization among smaller players in the industry as well as their unwillingness to invest in plant upgrading, expansion.

According to Basubas Philippine-based exporters especially in furniture making is always at the tailend in terms of competitiveness because other Asian country players are getting full support from their governments, while in the Philippines, players have to be "self supporting."

In terms of productivity, China is five times higher than the Philippines. Vietnam has also higher rate of productivity.

This year alone, the industry was beleaguered by several pressing issues, such as the declaration of the total log ban in the Autonomous Region of Muslim Mindanao (ARMMS), the Department of Agriculture (DA) ban in importation of leather due to the Foot and Mouth Disease (FMD), among others.

Despite these problems, Basubas said the industry is fighting to maximize the Philippine's edge in the furniture making, especially in design.

CFIF, through the help of foreign governments had been able to introduce programs to improve furniture exporting manufacturers' efficiency and competitiveness in the absence of support from Philippine government.

In 2004, Philippine furniture exports posted a total export value of US294.1 million, a far cry from China's US$12.6 billion, and Indonesia's US$1.7 billion.