Transcript Slide 1
The Changing Structure of the
Philippine Non-Wood Furniture and
Handicraft Industries:
Marketing, Trade and Policy
Implications
Isabelita M. Pabuayon
University of the Philippines Los Banos
IUFRO All Division 5 Conference Forest
“Production and Environment – A Productive Symbiosis”
October 29-November 2, 2007
Taipei, Taiwan
purposeof the
paper
To analyze the structural changes occurring
in the Philippine non-wood furniture and
handicraft industries
To identify the policy implications and
provide a framework for NWFP
competitiveness
sources of
data
Philippine Forestry Statistics, Department of Environment and
Natural Resources (DENR)
Department of Trade and Industry (DTI)
Philippine Rattan Marketing Study - Pabuayon et al 1988
Philippine Rattan Sector – Pabuayon et al 1996, INBAR
Philippine Bamboo Sector – Rivera et al 1996, INBAR
Bamboo Master Plan – Pabuayon et al 1997, DTI
State of Philippine Furniture Sector Report – Pearl2, 2004
Philippine NTFPs: Status and Strategies, Pabuayon, 2005
FRAME Philippines Rattan Value Chain Study – USAID, IRG,
Enterprise Works/VITA 2006
howsignificant
Livelihood for upland and rural communities and
industries
- 15,000 gatherers
- 2,000 handicraft and 15,000 furniture manufacturers
- 768,000 workers and subcontractors
Foreign exchange - 98% of total NWFPs
- B&R furniture, chairs, seats, basketware/wickerware
Rural housing, materials and infra for agriculture and
fishing sectors
Unmarketed environmental services
changing industry
structure
Declining comparative and competitive advantage
due to dwindling raw material supply and increasing
labor costs
Impacts on
- input sourcing and utilization
- product designs
- capacity utilization
- market shares
inputsourcing
All raw materials
previously locally
sourced, cutting
permits increasing
until 2000 with 370
but dropped to
32 in 2005
Increasing raw
material imports
(estimated at 14%
of current use)
Rattan cutting permits, Philippines
1980
1990
2000
2005
0
100
200
Cutting Permits
300
400
Rattan and bamboo imports ('000 US$)
Philippines 1996-2006
1600
1400
1200
1000
800
600
400
200
0
High US$1.50M
Low US$0.39M
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Rattan
Bamboo
Both
Types of rattan imports
Philippines 1996-2006
10%
38%
52%
Pole
Split/core
Manufactured
Types of bamboo imports
Philippines 1996-2006
9%
5%
86%
Raw mat
Furniture
Other manufactured
Major B&R imports:
Raw materials
inpututilization
From 99% pure rattan or bamboo to greater use
of smaller diameter and combination of rattan or
bamboo and other materials (wood, metal,
indigenous fibers)
Greater product diversification
Has remained generally labor-intensive from raw
material harvesting to quality control and
packaging of final products for delivery to
markets, some degree of mechanization in
certain manufacturing stages for large firms
productioncapacity
Capacity utilization for furniture firms from over 90%
(1987 survey) to 57-77% (2004 survey)
Predominantly small and medium-scale
Majority locally-owned, others partly-owned by
foreign nationals
60% of output from Cebu
Employ male and female workers
Up to 80 of production through sub-contracting
arrangements
60-90% of output for export
Target mid-range to high-end market segments
sunvalleyrattan
philippines
modern
sunvalleyrattan
innovative
philippines
Percentage shares of bamboo and rattan exports
Philippines 1995-2006
5%
Bamboo
Rattan
95%
Percentage shares of rattan exports
Philippines 1995-2006
1%
30%
Others
Furniture
Seats
69%
Rattan exports (FOB '000 US$)
Philippines 1995-2006
1978-1985: 38%/yr
140,000
1995-2006: 5%/yr
120,000
100,000
80,000
60,000
40,000
20,000
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Others
Furniture
Seats
All
Percentage shares of bamboo exports
Philippines 1995-2006
8%
4%
37%
51%
Others
Torches
Furniture
Seats
Bamboo exports (FOB '000 US$)
Philippines 1995-2006
10,000
8,000
6,000
4,000
2,000
-
High US$7.74M
Low US$3.95M
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Others
Torches
Furniture
Seats
All
Rattan and bamboo exports (FOB '000 US$)
Philippines 1995-2006
140,000
120,000
100,000
80,000
60,000
40,000
High US$129M
Low US$66M
20,000
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Bamboo
Rattan
Both
Furniture exports by type, Philippines 2001
Declining share of
B&R furniture:
13%
33%
14%
rattan 73% of
US$130M (1987)
Total
US$287M
40%
Rattan-Bamboo
Wood
Metal
Others
Furniture exports by type, Philippines 2006
15%
23%
10%
Total
US$275M
52%
Rattan-Bamboo
Wood
Metal
Others
Basket/wickerwork exports (FOB '000 US$)
Philippines 2001-2006
High US$78M
Low US$52M
80,000
60,000
40,000
20,000
2001
2002
2003
2004
Basket/wickerwork
2005
2006
marketdiversification
1997-1998 (70+ countries)
N America
49.12%
C America
0.06
S America
1.64
E Union
30.85
E Europe
0.00
W Europe
0.43
Japan/Australasia 10.72
ASEAN
1.19
China/Korea
1.41
Middle East
1.85
Africa
0.61
Caribbean
1.90
Others
0.26
2005-2006 (90+ countries)
66.22%
0.53
1.03
14.83
0.18
1.01
9.10
0.74
1.29
3.60
0.43
1.06
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top10markets
USA
Japan
Australia
Hawaii
Italy
Great Britain
Spain
France
Canada
Netherlands
Total
61.31%
5.10%
3.37%
2.74%
2.42%
2.22%
2.21%
2.08%
1.79%
1.58%
84.80%
potential
value
Around US$180 million export industry
Domestic market
implications
Seek new opportunities for displaced
workers and small operators
Address the declining competitiveness
Need for more organized and concerted
courses of action
Investments in human and capital resources
challenges and
opportunities
Superior craftsmanship for medium and high-end
market segments
Growing domestic market
Enhanced environmental awareness (ecotourism
and green markets)
B&R are renewable resources
Integration of plantation development in CBFMs
Continuing R&D in production, processing and
utilization
Adaptation strategies in sourcing and use of
alternative raw materials
Liberalized trade (access to markets and imported
inputs)
Government support for SMEs
NWFP competitiveness framework
Sustainability of the Resource Base
• Plantation development
•Enrichment planting
•Regeneration of existing stands
•Efficient harvesting systems
productivity
efficacy
Effective Policies for NWFPs
• Facilitative export procedures
•Tax incentives/privileges for
importing raw mats/inputs
•Enhanced domestic trade
of outputs and inputs
Cost
Quality
COMPETITIVENESS
Flexibility
Time
values
Continuing R&D
for new technologies
•New designs, products, uses
•Efficient production/
operational systems
innovation
Favorable Support Systems
•Improved infra: ports, roads
•Education and skills devt
•Financing schemes
•Market intelligence
thank you