Fine Jewelry Exports Down Due to Strong Peso, Bad Global Economy

The gold-based fine jewelry industry in the Philippines has been resorting to retrenchments this year due to a combination of adverse developments here and abroad.

This was revealed by Cecille Ramos, president of the Meycauayan Jewelry Industry Association, Inc. (MJIA) in an exclusive interview with the PHILEXPORT News and Features.

“The industry is down to 40 percent of its previous operations,”� Ms. Ramos said. “I used to have 40 employees. It is down to 10. My goldsmith is now driving a tricycle.”�

The peso has strengthened at a time that the US and European economies are at a recession, making jewelry exports to those countries very expensive.  The peso has risen in value against the dollar to its highest in five years.

The high-end markets in Europe and the US are the country’s main destination for locally made fine jewelry considered the best designed in Asia.  Orders from those traditional markets have dwindled for the second successive years, Ramos said.

The situation got worse when prices of local gold shot through the roof, the jeweler explained.

She said that local gold bought from the open market is now priced at P2,000 per gram.  Several grams are needed just to produce a ring. Gold bought from the Bangko Sentral ng Pilipinas is even more expensive. With value added taxes and other fees when you buy gold from the BSP, the price per gram totals P2,400, she added.

Prices of gold mined by small miners and the big mining companies follow the prices of gold in the international market.  The yellow metal now commands close to $2,000 per ounce in international gold markets as people resort to buying the precious metal while the value of the dollar goes down.

“If only to survive the hard times, many local jewelry makers have shifted from gold as base raw material to silver,” she said. Silver jewelry is for the lower end of the precious jewelry market.

The local jewelry industry was coaxed out of the underground economy in the early nineties following the passage into law of the Jewelry Development Act and the Export Development law. It was then groomed by the Export Development Council as one of the country’s most promising export winners.

It rode on the export boom of the nineties but could not match the spectacular growth of a similar industry in Thailand despite the fact that Filipino designers kept on winning global jewelry design contests in the past two decades.

— Abe P. Belena, Reposted from PHILEXPORT News and Features 

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