Government Support Sought for Manufacturing Sector in the Philippines

byDanielle Venz, Reposted from PHILEXPORT News and Features

Chemical manufacturers are asking for government support, including keeping the peso competitive, to help boost their sector and the whole manufacturing industry.

“Trade competitive, which means the peso should not be too strong and should be more on the weaker side of the band. That would help (improve) the competitive position of our industries,” said Oscar Barrera, PHILEXPORT trustee for the chemical sector.

Barrera said exporters would earn more revenues with weaker currency, as locally-produced goods could be sold cheaper as compared to imported goods.

He said the ten million Filipinos working abroad, on the other hand, could send more money to their families and relatives in the country.

“They have families here who will have more capacity to pay for goods and that will stir up the economy,” he noted, adding that they prefer a 44 to the dollar level against the current 42 level.

To improve the country’s trade competitiveness, Barrera also underscored the need to rationalize the rules and laws affecting business.

“One example is the perennial problem of local government ordinances which allow local governments to tax even trucks that pass through their barangays or cities. These add to the cost of doing business and distribution around the country,” he pointed out.
Barrera added that some environmental rules are also affecting business, where almost every city now can make their own ordinance.

“Some of the environmental rules do not really help… kind of contrary to the pollution rules set up by the national government. So it’s confusing; every place has its own idea and that’s not good,” he noted.

Moreover, Barrera urged the government to provide the manufacturing companies using locally-made products a rebate equal to the tariffs that would have been paid if the goods are imported.

With adequate support, he expressed optimism that manufacturing, particularly the chemicals industry could grow as much as 15 percent a year compared to only three to five percent it posted in 2011.

“It can grow by 15 percent because there is a lot of capacity already installed here and they are not running at full capacity. It is a matter of going on two, three shifts and production can be done quickly,” Barrera said.

He projected the sector sustaining the three to five-percent growth this year amid the recession still happening in the developed countries.

“The exports of chemicals usually go to First World countries. Our big markets are Europe, Japan, United States, while some (of our products are shipped) to the Middle East,” he noted.  —