To thrive in the current era of globalization, businesses opt to act on a more global perspective. Companies can engage in exporting in which the benefits can be substantial. The likeness of increasing sales and revenue will help expand the market of businesses as various economies in the world build up their purchasing power. Businesses are no longer reliant on a particular market for success measure. For many developing countries, especially the majority of Southeast Asian nations, exporting opens opportunity to earn foreign currency that can aid in the advancement of the domestic economy. Moreover, the experiences acquired with working in diverse markets— enriched familiarity of other products and services, and knowledge on the new ways to market, among others—are of value vis-à-vis the ability to compete domestically.
The ASEAN Market
The global economic activity has shifted and now spotlights Asia as the epicenter. The two giant economies of China and India help in fostering growth and promoting development in the region. The Association of Southeast Asian Nations (ASEAN), with its economic community project, spearheads the creation of a single market and production base1)In actuality, the AEC is grounded on four initiatives: single market and production base; competitive economic region; equitable economic development; integration into the global economy. When discussing economic integration, the theme of single market and production base is more often the focus. among its ten member states. The ASEAN Economic Community (AEC), anticipated to be in place by the end of 2015, facilitates free flow of goods, services, investments, capital, and skilled labor across the region. The one market strength of ASEAN represents the eighth largest economy in the world with an amalgamated gross domestic product (GDP) of $2.356 trillion, even larger than the GDP of much larger countries like Brazil, India, and Russia. According to Asian Development Bank (ADB) Vice-President Stephen Groff, if growth trends persist, by 2050, ASEAN could be the fourth largest economy2)Groff, S. (2014, June 23). ASEAN Integration and the Private Sector. Speech presented at German-Business Association AEC: Integration, Connectivity and Financing: What Does Regional Integration in Southeast Asia Mean for the German Business Community? in Germany, Berlin.. With a relatively young labor force of over 600 million people, the potential market that ASEAN offers is even larger than that of the European Union or North America3) See fn. 1 . Almost 54% of ASEAN GDP comes from total merchandise exports that amount to over $1.2 trillion, making the region one of most open economic zones in the world4)Asian Development Bank Institute. (2014). ASEAN 2030: Toward a Borderless Economic Community. Japan: Asian Development Bank Institute..
The Philippines and Exporting5)Information are from varied sources. The Philippines: General Economy and Export Industry. (n.d.).Retrieved April 20, 2016, from http://www.philexport.ph/philippines-economy; Philippines Exports 1957-201.(n.d.). Retrieved April 20, 2016, from http://www.tradingeconomics.com/philippines/exports
Statistics shows that Philippine exports are in a continuous decline since April 2015. In January 2016, from a recorded value of $4.4 billion in January 2015, the fall was at 3.9%. However, exports in the country still comprise nearly a third of the GDP. Top exports according to total receipts are electronic products which stand for 51.1 percent of aggregate exports at a $2.142 billion value, machinery and transport equipment which have a worth of $275.56 million, other manufactures posting sales at $270.96 million, woodcrafts and furniture with a contribution of $236.51 million and ignition wiring set and other wiring sets used in vehicles, aircrafts and ships recording revenue of $174.30 million.
Top export destination of the country include Japan with yields totaling to $950.52 million, the United States of America in which receipts are equal to $698.85 million, Hong Kong with total exports valued at with $438.79 million, China recording profits at $405.65 million, and Singapore with export earnings surveyed at$278.70 million.
The Significance of the Philippine Food Industry
This part of the article derives heavily from the forum Seminar on Global Competitiveness of the Food Industry in the Philippines held on April 8, 2016. This event which featured business matching activity between local food manufacturers and major food companies from South Korea was made possible by the ASEAN-Korea Centre (AKC), the Export Marketing Bureau of the Department of Trade and Industry (DTI-EMB), the Foreign Trade Service Corps of the Department of Trade and Industry (DTI-FTSC), and of the Department of Tourism (DOT).
The seminar and workshop allowed for Filipino and Korean companies to enhance their relationship by exchanging tangible business opportunities that will enhance the global competitiveness of the Philippine and Korean food industry. The event commenced with welcoming remarks from the DTI-EMB Director Senen Perlada in which he hoped for the Philippines to become a vibrant food destination in Asia with the active support from Korean food companies as one of the top trading partners of the country. Deputy Head of AKC Lee Dong Go then underscored the potential of Philippine food products in procuring advantage in the global market.
DTI-EMB Assistant Director Anthony Rivera followed up with a situationer of Philippine trade and Philippines-South Korea Trade Opportunities. He stressed the weighty contribution of South Korea to the Philippine economy. South Korea has always been one of the leading trading partners of the Philippines and has been one of the principal market ends for Philippine products with overall receipts of $58 million. The close ties between these two countries are also evidenced by the massive number of tourists visiting every year. Last year, Philippines tallied more than a million Korean visitors to the country, the highest from any nations. Additionally, investments from South Korea valued at $509 million continuously pour into the Philippines.
DTI-EMB is hoping to alleviate the burden of several Philippine businesses to partake in international business. Currently, DTI-EMB offers support for Philippine exporters through investments, market promotion, capacity building, product design, and brand development. It also educates exporters to cultivate compliance with standardization concerns promoted by various international organizations.
It was also accentuated during the presentation that fresh and processed food industry shall look for opportunities across national borders to broaden the market in which Korea is one of the best options for goods destination. Korea is an open market for fresh and processed food such as bananas, pineapples, and dried mangoes. According to Specialist of Strategy of CJ Cheiljedeng Lee Ho Yeon, it is likely that South Koreans may have immediate liking of Philippine calamansi and cayenne pepper. He also mentioned the power of coconut oil from the Philippines as this product presents several purposes to the consumers. Moreover, he stressed that both countries can reap benefits from each other by developing procurement processes. What technology Philippine lacks, South Korea can provide. This can be compensated by agreeing on low-cost goods procurement by South Korean companies. He ended his session by pointing out that the Philippines is one of the most suitable markets in Asia and he would look forward to tie up with Philippine businesses in the very close future.
To have considerable progress, concerned agencies, potential exporters, and corresponding laws, orders, and development plans should work in close association. It is in the will of the government and the export industry to forward a more global and regional economic participation for the Philippines. It is imperative to discern new markets to trade with, to ease the process frictions for business engaging in export-oriented business, and to minimize the barriers for foreign direct investment. If these were to be efficiently and effectively done and observed, the future of Philippine exporting is far from grim.
By Lea Salen Peralta, ASEAN Correspondent from Philippines
References [ + ]
|1.||↑||In actuality, the AEC is grounded on four initiatives: single market and production base; competitive economic region; equitable economic development; integration into the global economy. When discussing economic integration, the theme of single market and production base is more often the focus.|
|2.||↑||Groff, S. (2014, June 23). ASEAN Integration and the Private Sector. Speech presented at German-Business Association AEC: Integration, Connectivity and Financing: What Does Regional Integration in Southeast Asia Mean for the German Business Community? in Germany, Berlin.|
|3.||↑||See fn. 1|
|4.||↑||Asian Development Bank Institute. (2014). ASEAN 2030: Toward a Borderless Economic Community. Japan: Asian Development Bank Institute.|
|5.||↑||Information are from varied sources. The Philippines: General Economy and Export Industry. (n.d.).Retrieved April 20, 2016, from http://www.philexport.ph/philippines-economy; Philippines Exports 1957-201.(n.d.). Retrieved April 20, 2016, from http://www.tradingeconomics.com/philippines/exports|