Executive Forum 2001
Montreux, Switzerland
26-29 September 2001

Interviews

Working with a large network Sergio Ortiz-Luis, Jr., President, Philippine Exporters Confederation, Inc (PhilExport)

Ortez-Luis: The Department of Trade and Industry is in charge of promotion. It has under it certain agencies, one of them the PICT – the Philippines International Trade Corporation, which was originally trading with the Eastern bloc. They do bulk buying and arrange for bulk exports. The other promotional agency is CITEM, the Centre for International Trade and Expositions, responsible especially for small and medium exporters. Another is the Trade Training Centre for exporters. The fourth is the Design Centre, which helps small exporters in design and packaging. The Bureau of International Export Trade Promotion, which is in charge of foreign postings, now does not have many representatives abroad and its budget is very small, but it is used by virtually everyone.

A law set up the Export Development Council composed of nine Cabinet Secretaries or Ministers who have anything to do with trade and nine private sector representatives. The law also provides that the promotional and information arms of the Department will be privatized. It was supposed to happen two years after the passage of the law, which was in 1994. But because of the difficulty – the legal problems – in trying to shift the budget to the private sector, we have not yet privatised these institutions. Certain functions have been privatized, such as the Export of Development Council, which is staffed and funded 50-50 with PhilExport. Some functions like the one-stop shop for export documentation have already been privatized (PhilExport is running that), along with certain trade promotion programmes, like that for furniture, and some of the regular fairs.

I think that in the Philippines the most successful area of public-private partnership is the Export Development Council.

Tell us about the PhilExport: what it does, how many members it has…

Ortez-Luis: We have about 7,000 exporters in the Philippines, the definition of which is somebody who in one year has achieved one export. Out of these, the membership of PhilExport is a little more than 3,000, but they account for 75 percent of the country’s exports. It’s completely private although we have ex officio Deputy Ministers or UnderSecretaries sitting on our board for purposes of co-ordination. We are self-sufficient in that we do carry out certain business. We operate the bonded warehouses. We operate the one-stop shops all over the country. Exporters are charged fees for services. We conduct training and seminars and advocacy fora. Lately, under the law, we were able to set up an export and industry bank. It has grown to be very large in only five years. However, knowing that exports account already for 50 percent of GDP, a single bank of this kind cannot be of overwhelming consequence. It is not possible for one bank to get more than 5 percent of the market. We try to service small firms.

Under the law we received a grant to operate our World Trade Centre, owned by PhilExport, although we have sublet some of the functions and operations.

We also have some foreign grants in recent years, particularly with USAID, which we use for export promotion and for trade policy advocacy.

What are the most important things as an exporter that need to be done, from what your members tell you?

Ortez-Luis: Our biggest problem, especially after the Asian crisis, is access to finance. And the hardest hit really are the small exporters. That is why, among others, one of the co-operations we carried out with ITC was localizing the How to Approach Banks publication and on finance for SMEs.

We co-fund it. We find the contractor to localize the volume. We share in the costs of the consultants. We print it and we propagate it. The first one we had to do two reprintings already because there was so much demand. The second one is coming out already and even now I think we will have to reprint it.