BOI prepares GDH sector to be more globally competitive
Business Mirror
November 16, 2016

THE Philippine Board of Investments (BOI) is preparing industry players in the gifts, décor and houseware (GDH) sector to become more competitive suppliers in the global market, as it recently partnered with the University of the Philippines-Institute for Small-Scale Industries (UP-ISSI) in training the local players in preparing for, responding to and recovering from various business challenges.

Sponsored by the BOI through the Manufacturing Resurgence Program (MRP), a total of 55 participants from 26 players in the GDH sector, comprised mostly of micro, small and medium enterprises (MSMEs) were capacitated by UP-Issi on how to formulate their respective Business Continuity Plans (BCPs) in the light of business difficulties, emergencies and disasters.

Representatives from the Home Accents Group of the Philippines Inc., the Philippine Federation of Furnishings Associations and the Philippine Exporters Confederation Inc. also participated in the workshop.

A BCP is an essential component of a firm’s response planning. It sets out how the business will operate following an unforeseen adversity and how it expects to do “business as usual” in the quickest possible time afterward. The BCP workshop is one of the capacity-building measures outlined on the recently approved GDH Road Map, which targets the sector’s export growth at 20 percent in the next five years. The GDH Road Map was crafted by the UP-Issi in consultation with industry stakeholders, the BOI and other relevant government agencies.

Other recommendations on the GDH Road Map call for better product-pricing advisory services, tax-free importation of commonly imported inputs of the industry, and lower income tax for MSMEs to offset increasing production costs.

“The Philippines is world-renowned for its quality craftsmanship as most of its homegrown products are handmade. With the implementation of the road map in full swing, the sector now has a blueprint on how to revitalize market share by making an impact in the international market,” Trade Assistant Secretary for Industry Development Rafaelita M. Aldaba said.

“These industries employ between 690,000 and around a million people, so it is important that the GDH sector gets the necessary boost as it provides much-needed employment, especially in the countryside. The implementation of the recommendations on the road map, such as the conduct of capacity-building programs, will allow the sector to be more competitive and better prepared to participate in the global value chains, including taking advantage of the already integrated Asean market,” she said.

The GDH Road Map indicated there are around 2,412 handicraft enterprises in the country, most of which are MSMEs, with majority located in the National Capital Region, Cordillera region, Region 5 and Region 12. Although recent figures indicate an increase of the Philippines’s GDH exports from 2010 to 2014, other neighboring countries have already surpassed the country’s export output of similar products.

Data from the Philippine Statistics Authority showed Thailand exported around $54.5 million worth of décor in 2013, while the Philippines shipped only $50.9 million that same year. Thailand’s giftware output amounted to $118.5 million in 2014, while the Philippines exported only $23 million. For housewares, Vietnam remains the top exporting country, with $367 million worth of exports in 2014, compared to Philippine export shipments of only $19 million.

China dominates the low-end handicraft and décor. To sustain the momentum, which started in the 2000s, it has shifted to value-added products in response to large demand from the United States and Europe, according to the Confederation of Handicraft Exports and Artisans Inc.

Although the latest figures show the GDH accounts for barely 1 percent of total Philippine exports, the sector remains unfazed.

“Our country’s strength lies in offering high-end products with world-class designs made by our master craftsmen,” Aldaba said.

For the month of October this year, three related events were held showcasing the world-class creativity and unique cultural heritage of Filipinos in the GDH sector, namely, the HABI Market Fair which focused on fabrics with artisanal designs; the Manila FAME, considered as the country’s “premier design and lifestyle event”; and the National Arts and Crafts Fair, which involved cooperatives and SMEs from the countryside showcasing their various products, such as baskets and fabrics, among others.

The first two events were intended for the high-end local and foreign markets. The last one targeted the domestic consumer market.□