Exporters
currently holding fort in the Philippines are now looking at moving to China or
Vietnam as high electricity rates in the country cause them to lose their
competitive edge in the global market.
According to Nora Halili Lao, holiday and
gifts sector trustee of Philippine Exporters Confederation Inc., the high cost
of power in the country made exporters’ prices too expensive to compete with
many of their counterparts, causing them to lose sales.
She said electricity accounted for 40-50 per
cent of exporters’ total operating expenses. Considering this, it was difficult
for exporters from the Philippines to price their products at more competitive
levels.
"Producers and manufacturers suffer. They
said they are no longer competitive [here], so they go to [other] countries for
an ocular inspection to determine if they can compete [from there]," she
said in a statement posted on Philexport’s official website.
The countries most favored as alternative
locations were Vietnam and China, which both have lower power rates than the
Philippines, she said. Some furniture exporters have actually moved to Vietnam
and some buying agents have already set up offices there.
Before transferring, however, she said
manufacturers and exporters were still conducting ocular inspections and doing
their homework in the other locations they were considering.
"They want to compare and know if it is
true that electricity is the one killing them. [There are] buyers who do not
want to come here because products have become more expensive due to high power
cost," she related.
The Philippine Chamber of Commerce and
Industry, in a wish list submitted to President Aquino late last month, sought
the crafting of key policies supporting the energy sector, particularly a
five-year electric power industry roadmap.
The country’s long-term power sector roadmap
would then be based on this medium-term plan, the business group said.
This roadmap should contain solutions to bring
electricity rates to more competitive levels, build adequate generation
capacity for Luzon, and resolve the Mindanao supply shortfall, PCCI said.
Abigail L. Ho
Philippine Daily Inquirer
Business & Investment Opportunities
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