by Debra Magallon-Estero/Gerome M. Dalipe of Sun.Star Cebu
THE Cebu export industry has prepared a position paper that will be sent to President Arroyo and lawmakers at the “soonest possible time” to help address the problems of the sector that is suffering from the effects of the global economic crisis.
The same position paper was presented to the Cebu Gov. Gwendolyn Garcia yesterday by the Confederation of Philippine Exporters Foundation Cebu Inc. (Philexport-Cebu) as the umbrella organization of all export groups.
The document is awaiting the signature of the representatives of the gifts, toys and house wares, garments, furniture, food,seaweed, industrial goods and fashion accessories groups, as well as the Mactan Economic Zone Chamber of Exporters and Manufacturers.
In an interview, Philex-port-Cebu executive director Fred Escalona said the first part of the position paper details the emergency measures that may be implemented by the government to help the industry.
Bailout
This includes a bailout solution from the banks or the National Government in the form of restructuring or re-scheduling of exporter’s loans, a moratorium on the payment of the principal loan amount or refinancing of distressed loan accounts.
Another measure that the industry is requesting for is a temporary exemption from payment of real estate taxes and community taxes.
Escalona, who also provided Sun.Star Cebu with a copy of the document, said Philexport-Cebu is also looking at a wage freeze after the group noticed that worker’s wages have been increasing annually. He added that another option would be for Congress to allow exporting companies to implement wage cuts, to avoid prevent companies from streamlining their work force.
“We wanted really to normalize our operations. Still we are going the downhill. Going toward recovery, we need a lot of financing,” said Jay Yuvallos, Philexport-Cebu president.
Yuvallos led Philexport-Cebu in presenting the position paper to Garcia who presided over a conference with various industry sectors in Cebu.
“We cannot deny the fact that the (export) orders have drastically down. We are looking for new market,” said Yuvallos. “If we don’t get the necessary support that we have, not everyone will be able to survive.”
Social responsiblity
Garcia appealed to commercial banks to help the ailing export sector by exercising their “social responsibility.”
But while the banking sector is willing to help mitigate the effects of the crisis, Cebu Bankers’ Club president Zosimo Lim, said: “Right now, it’s hard to commit.”
He said banks can extend financing to exporters on a “case-to-case basis” to abide by the regulatory policies of their central offices.
“It will boil down to payment capacity. They (export firms) will be evaluated properly,” he said.
Lim assured, though, that the bankers’ group can draft a resolution on the state of the exporter sector in Cebu and submit this to their central office.
While Philexport Cebu admitted the sector is hit by the crisis, it could not tell how many of its members are affected.
“We have (export) industries that have gained international recognition.
We have designed better that the others. We have the capability and reputations. Are we going to allow us to go to waste? That‘s the enormity of the problem,” said Yuvallos.
Warning
Although the current crisis is temporary, Yuvallos warned: “If we will not do something, it might become permanent for us while everybody else is still running.”
He thanked the stakeholders, government agencies and Governor Garcia for taking steps to help the ailing export sector in Cebu.
In its presentation to the governor, Philexport-Cebu said the crisis has resulted in downsizing, factory shutdown, retrenchment, loss of foreign exchange revenues and depletion of assets values, among others.
“We are also requesting for leniency from SSS (Social Security System) to cut by half the employer’s share of contributions,” Escalona said, adding that the present employer’s share is 67 percent of the total SSS contribution.
The second part of the position paper details the requests of the export industry stakeholders for assistance in preparationfor the market’s recovery, which is expected in 2010. Among the requests are for Congress to amend the Energy Regulatory Commission (ERC) law to spare exporters from paying system loss, technical loss and administrative loss charges.
Philexport-Cebu is seeking a moratorium on power rates increases for at least 24 months.
“Cebu has one of the highest electricity rates in the country. Electricity is one of the major cost component in an exporter’s manufacturing operation,” the group said.
Philexport-Cebu is also asking the government to support capacity building initiatives and grant outright subsidies for export promotion, including the P1 billion export promotion fund verbally approved by
President Arroyo last year.
“We need the government to heed this call immediately. We could not wait any longer,” Escalona said. (DME/GMD)
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