Local market keeps export margins safe

CEBU, Philippines - As the export market braces for a tougher battle ahead as the global recession is still far from over, more and more exporters are balancing their margins by taking advantage of the local market.

“Most of our Philippine exporters are kept afloat by the local market this is why we do not loose faith in the local market especially during the slowdown of demand in the international market,” said Marlene G. Bedia, Mandaue Chamber of Commerce and Industry executive director in an interview.

Bedia said that exporters, most especially their Chamber members, have learned to accept the grim outlook for the export market considering the global recession but then most of them continue to see opportunities at the height of the negativity in the economy.

She said that most exporters especially furniture players are relying on the demand that is building up in the local market as new infrastructure investments such as new hotel constructions and refurbishing are being done in Cebu.

She said that at this point, firms are doing restructuring processes to cut down the “porks” in their operations and they have streamlined their business systems without sacrificing the level of quality and productivity.

“These moves are essential to help export firms survive and be in a better position once the economy starts to roll back up,” said Bedia.

She said that although there have been retrenchment cases from the export sector, there are already a few export companies who are now starting to re-hire to do retooling measures to strengthen productivity in preparation for the much anticipated economic upturn.

Meanwhile, in a separate interview, one of the Mandaue Chamber members Profoods International marketing director Jason Uy said that despite the lesser consumer consumption, there is still a high demand in the local market for export products like their dried mangoes and other preserved fruits.

Although he agreed that their export operations has been experiencing a slowdown, there are still orders coming from countries like US, Europe, Latin Americas, China, Japan, Korea, Australia and New Zealand where there products are distributed.

Uy said that although the bulk of their operations are targeted towards penetrating the international marketplace, they still get ample margins from the local market.

“We are still hugely dependent on our export market but lately with the global recession, the local market has helped us balance out our profit margins so aside form being aggressive with international trade events, we also spend on local fairs to intensify our exposure in the local market,” said Uy.

Bedia said that to further assist their members at these times of recession, their Chamber will be organizing a forum on managing costs and finding opportunities amidst crisis this coming May 22 and the first of this series will talk about managing electricity cost, which will be a tie up between the Visayan Electric Company (VECO) and the Department of Science and Technology (DOST).— Rhia de Pablo