Government subsidy for exporters unlikely

The furniture exporters' proposal for a subsidy from the government is far from being a done deal as the latter is unlikely to grant such request.

Department of Trade and Industry (DTI) chief Peter Favila said the government is ready to extend assistance to the exporters and has in fact already granted a few requests, however, considering the cash strapped status of the government, giving subsidy for international marketing might be impossible.

"The help of the government can't all be financial," said Favila. He however said they are open to listen to proposals.

For its part, the Cebu Furniture Industries Foundation Inc. (CFIF) through its president Michael Basubas said, the subsidy plan was already verbally presented to President Gloria Macapagal-Arroyo in one of their brief meetings.

However, they were not able to explain it lengthily to the President, hence the group is now crafting another proposal.

While, Favila is clueless on the major concern of exporters in financial vehicle for marketing, he said furniture exporters could take advantage of the credit facilities made available for SMEs (Small and Medium Enterprises).

On the other hand, the DTI chief said that he wanted to know exactly what the furniture exporters are asking, referring to formal "black and white" form of request.

Clearly, what the government could offer further is providing intense market access to potential countries, Favila emphasized.

But, CFIF's planned proposal is more than that of credit access, but a subsidy help from the government, especially in attending expensive international exhibition shows abroad.

"We are going to hit the global market. It is very expensive for us to reach this target market, plus we are suffering from losses of the strengthening peso, a government subsidy could help us, just like what the other countries are doing to their furniture export industry," said Basubas.

Upon the exporters' loud complaint of losses contributed by the strengthening peso to the US dollar, the Philippine government offered help by scrapping the travel tax of exporters while attending exhibition shows abroad.

However, exporters said the travel tax incentive can only help very little in their increased operational cost in marketing overseas, as they are now exploring other continents, not only the United States.

Basubas reiterated that although this support is a relief for exporters, what the furniture makers need most is a government subsidy to aid them in their international ventures.

For a company to join an international exhibition show abroad needs over P1 million, that in fact is a very modest budget. Space rental alone for exhibition shows is already a huge expense, he said.

Demand for global furniture market has plunged by about 30 percent in the last few months, "budget for furniture is eaten up by high gasoline expenses," Basubas said.

Other competing countries such as Vietnam, Thailand, and China, their governments are providing subsidies for furniture exporters in their respective countries for overseas marketing. While in the Philippines, exporters have always been "self supporting," Basubas said.