Filipino Exporters Seek Power Subsidy

Manila Bulletin
By BERNIE CAHILES-MAGKILAT
April 16, 2012, 6:34pm


The Philippine Exporters Confederation (Philexport) is asking for a P200-million power rate subsidy for the small and medium exporters to at least cast a semblance of level playing field with big foreign-owned exporters, which are granted huge P1.6 billion power rate subsidy this year.


Philexport president Sergio Ortiz-Luis Jr. told reporters the P200-million power rate subsidy for the SME export¬ers is part of about P500 million fund be¬ing sought by the association as a form of an Export Support Fund that would help defray cost of joining in trade fairs and capacity building.


Ortiz-Luis said they have already submitted to Trade and Industry Sec¬retary Gregory L. Domingo a formal letter for endorsement to Malacanang as early as December last year. The P1.6 billion power rate subsidy, which comes in the form of discounts to the power rates of locators of the Philip¬pine Economic Zone Authority, was approved early this year.


“If the government gives discounts to these big exporters then it should also provide something to the locals, particularly exporters using indig¬enous products,” he said.


According to Ortiz-Luis, while the grant of power rate discounts to big exporters is valid the money be¬ing used to pay for the discount will have to come from another source.


“This is a zero-sum game so the discount granted to the big export¬ers could have been taken from another sector and so there is a sector that is affected by this sub¬sidy. If one sector’s rate is reduced then another sector is increased. Who is shouldering the cost? Is it the household? My feeling is it is the household, unless it is taken from the Presidential Fund, which I doubt,” he said.


“While this is valid, there has got to be a long term policy to help de¬velop the small exporters, especially those using indigenous materials,” he said.


He pointed out that the big ex¬porters, mostly electronics firms un¬der Semiconductor and Electronics Industry of the Philippines Inc., im¬port as much as 70 percent of their inputs while the indigenous exports are almost 100 percent local.


“We need a long-term policy that puts priority for the SMEs. I have no qualms about SEIPI, but there has to be a policy to develop the indigenous exports because they are the backbone of our exports,” he said.