New room at the top

Title

New room at the top

Identifier

The economy

Language

English

Source

The Republic (2) 31 March 1973

Year

1973

Subject

Cottage industries -- Philippines

Handicraft -- Philippines

Rights

In Copyright - Educational Use Permitted

Fulltext

The ^Economy COTTAGE INDUSTRIES New room at the top Cottage industries are enjoying a boom these days. The growth has been so spectacular that, from virtual ly nothing in 1962, exports from cottage industries have jumped to No. 6 among the country’s major export products. Annual sales now exceed P250 million (about $37 million). This can only mean two things: more dollars for the country and more jobs for thousands of Filipinos, long beset by an endemic unemployment and underemployment problem. What brought about this boom? One factor is the respect that Philip pine handicrafts have been gaining abroad. Another is the fact that Filipi nos are discarding their propensity for foreign-made goods and are turning more and more to home-made ones, both out of a growing pride in their own products and the realization that, in terms of quality, Philippine-made items can compare favorably with their “stateside” counterparts. Today, both local and foreign buy ers are competing with each other in purchasing finely crafted furnitures, carpets, capiz lamps, wall decor, woodcarvings and other articles bom out of Filipino ingenuity and art. It is estimated that as much volume as that sent abroad, if not more, is being sold in local supermarkets, gift shops and even “sari-sari” stores. These products are being turned out by more than 40,000 small and medium-scale enterprises now register ed with the National Cottage Indus tries Development Authority (NACIDA1. the government agency set up in 1962 to develop, stimulate, regulate and expand what used to be a chancy economic venture in some cramped household or tree-shaded yard. PHILIPPINE LABOR Bright prospects in Indochina SAIGON — Filipino labor, both skilled and semi-skilled, made its mark in Indochina in the decade before the ceasefire. It slackened considerably with the phasing out of foreign troops, but with the massive recons truction and rehabilitation plan for the whole region over the next de cade, it stands an excellent chance of repeating what is considered a general ly creditable performance. Numbering about 8,000 in the late 1960s, Filipino laborers today in the region barely total 2,500 -*• about 700 each in South Vietnam and Laos, about 200 in Cambodia, and 976 in Thailand. Thailand is included in this account for reasons of proximity and the fact that American organizations displaced from Indochina by the provisions of the Paris ceasefire agreement have moved to that country and have ex pressed preference for Filipino labor. Labor policies in Thailand and South Vietnam are necessarily restric tive especially in the case of the latter because of its own problem of relocat ing a substantial portion of its 1.1-million-man armed’forces into peacetime jobs. Those in Laos and Cambodia are more lenient; not much is known Handicraft products on display: both for local and foreign markets. “We will continue to expect a con sistent rise in these exports,” says Mario Reyes, the NACIDA’s 36-yearold administrator. He explains it thus: “Cottage wares, although they proliferate in other countries, compete almost insigni ficantly with their own kind because of their novelty, which is the touch stone of our stage in craftsmanship.” That novelty has been paying off handsomely for Philippine products. Between 1962 and 1969, Mr. Reyes said, there was a staggering average in crease of 1,020 percent in the exports about North Vietnam although uncon firmed reports indicate that the country would tend to simulate her •outhem neighbor. However, as reported by Emilio Cordova Jr., the Philippine labor at tache for Indochina and Thailand, the prospects for Filipino labor in the area remain bright. He points out to the Nomura Economic Research Institute report, which places the reconstruc tion needs of both North and South Vietnam at between 12 and 15 billion US dollars, over the next ten years. The bulk of that will not be in cash but in technical help and materials. A strong point for Filipino labor in the coming reconstruction work in In dochina is its large, by Asian standards, pool of trained technicians familiar with Western-type equipment and work procedures all available at comparatively, by Western standards, lower cost. While Western aid to Indochina would necessarily take many forms, one major preoccupation will be the rehabilitation of damaged infrastruct ure in all aspects of government ser vices — health, transportation, educa tion, public works, commerce and trade. Cordova reports that Cambodia alone needs over 2,000 technicians and over 6,000 skilled workers in its proposed industrialization program — in the electrification, mining and cons truction fields. South Vietnam will have to rebuild at least 2,000 bridges, repair gaps in of six major cottage industries, name ly, woodcraft, food preservation, mat weaving, shellcraft, bamboo and rat tancrafts, and fibercraft. In woodcraft alone, exports rose by 2,000 percent; food preservation, also 2,000 percent; matweaving, 1,000 percent; shellcraft, 500 percent; bamboo and rattancrafts, 350 percent; and fibercraft, 300 per cent. Three years after NACIDA’s crea tion, cottage-industry exports brought in the dollar equivalent of P29,879,918. In 1966, exports in creased by P4 million and in 1969, by its rail lines, rebuild schools and hos pitals and repair almost 2,000 miles of primary two-lane roads. To assure Filipino participation in this massive reconstruction work, according to Cordova, it is imperative that representations on a governmentto-govemment level be made with the countries known to take part in the projected reconstruction program. This would indicate labor agree ments with the United States, Japan, West Germany, the United Kingdom, France, Australia, the Republic of Korea and the other Asian nations which have indicated their readiness to help in Indochina’s reconstruction. Conferences on the ministerial level among the nations in regional alliances would likewise be in order. Of necessity, top-level representa tions have to be made with the aid recipient countries not only with re gard to the utilization of Filipino labor but the availability of Philippine materials and products. On this score, what can be readily said is that while Filipino labor is competitive, Philippine products are comparatively unknown. Filipino labor deployment in Indochina in the past decade undoubt edly earned a sizeable chunk of foreign exchange, but whether or not this has contributed much to the na tional income, is deserving of more study. P21 million. By 1970, cottage-industry exports had reached P182,266,000. Statistics for the first 10 months of 1972 showed a total ex port of P200,428.660. With this rate of increase, cottage industry exports can be expected in a few years’ time to come to within “striking distance” of the country’s five other leading export products. These are sugar, Pl.38 billion; logs and lumber, Pl.3 billion; copper con centrates, P966 million; copra, P679 million; and coconut oil, P643 mil lion. Apart from the increasing desirabil ity of Philippine-made handicrafts both at home and abroad, the rapid growth of cottage industries is also due to the incentives granted to small time producers with capitalization of Pl5,000 or less. These incentives in clude tax exemptions for sales of up to P200,000; tax exemptions for im portation of equipment, accessibility to government credit and loan facil ities, technical assistance through manpower training, and aid in the pro curement of raw materials, marketing and promotion. N ACID A has also entered into di rect trading with producers to elimin ate middlemen and thus reduce mar ket costs. Under this system, NACID^^j consigns or directly exports the prod\ I ucts of small-time producers with only a minimum markup of 5 percent. Other producers have started their own export trade by simply con tacting outlets abroad through the help of government agencies. Under this arrangement, they say they find it much easier to export than to find a local market for their products. To ensure that only good-quality handicrafts are sent abroad, the NACIDA set up an office at the Bureau of Customs to check outgoing prod ucts. Officials are aware that a few pieces of low-quality goods can wreak havoc on the industry overnight. NACIDA also established a technological and development center in Marikina' A the nation’s shoe-making capital, to^>^ improve techniques in the manufac ture of cottage products. The expansion of cottage industries will not only help solve the unemploy ment and underemployment problem, but even help hasten the industrializa tion of the country. Mr. Reyes points out, for instance, that the amazing growth of Japan’s electronics indus try — to an extent where it outpaced similar industries in other coun tries — wa§ due mainly to its reliance on small and medium-scale cottage in dustries to supply the elartronic com ponents. To achieve the same success, how ever, Reyes proposes the abandon ment of the old concepts in cottage industries, which in the past resulted in widely scattered efforts and, ulti mately, in substantial contributions to national development. With the initial, but already as tounding success thus far made, there is every reason to believe that cottage industries can be made to play a big ger role in the country’s economic growth. The hundreds of success stories, like that of the Tesoros who, after a modest start, made millions in the ex port of handicrafts, provide the best proof that Filipinos, given' the neces sary incentives, can work in partner ship with the government to realize the dream of industrialization and economic self-sufficiency. Page 14 31 March 1973 THE REPUBLIC

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