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Modest growth seen for PH garment, textile exports in 2024

Exports of garments, textile and apparel are seen growing by measly 2 percent to around $1.33 billion starting in the middle of 2024 as industry players expand into new markets to boost revenues.  

Robert Young, president of Foreign Buyers Association of the Philippines (FOBAP) and trustee for the textile, yarn and fabric sector of the Philippine Exporters Confederation Inc., said that 2024 will “not be an easy year” for the sector amid Russia’s invasion of Ukraine and the Israel-Hamas war causing disturbances in the supply chain.

Young said they are now looking for other markets that can be tapped aside from the current export markets which include the United States, Canada, European Union (EU) and Association of Southeast Asian Nations (ASEAN).

“So we are now looking for some other countries in South America and in the Middle East, we are now talking to them which somehow can add up to our production quantity,” he said. “We are already in the process of receiving orders from the new markets and the usual markets, they are still there. However, (these are) not as big as last year.”

Young sees high demand for basic wearables and fast fashion or high-end garments next year.

He said the achievement of 2-percent export growth by the middle of next year also hinges on government initiatives on establishing more free trade agreements (FTAs) with other countries, and a remedy to reduce power cost in the country or provision of energy subsidy especially in the export sector.

“Our free on board price is 15 percent higher than the ASEAN competitors therefore, it will be not an easy task for us in getting the appropriate quantity for our production,” he said.

Young said more FTAs and lower or subsidized power costs can somehow ease up production costs.

He also particularly cited the looming extension of the EU’s Generalized Scheme of Preferences Plus (GSP+) boosting the sector’s revenues.

“As far as productivity is concerned, we are ready and we have ample laborers as of now. This is due to lesser production orders,” he added.

Young also expressed hope that the labor cost will be maintained amid the proposed P150 legislated wage hike, which he said “for sure will again deter our plan or our projection to increase the export revenue in the midyear (of 2024).”

EU circularity policy marks shift from recycling to ‘resourcing’

Companies should shift to “resourcing” from “recycling” and make sure to integrate circularity strategies into their business value chains if they aim to comply with the European Union’s stringent circular economy (CE) policy, according to an international circularity expert.

Kazunori Kitagawa, chief of the Eco Management Center of the Japan Productivity Center, identified two key trends in the EU’s circular economy plan that he urged enterprises with business ties to Europe to keep up with.

One of these is the move from recycling to resourcing, in which products cannot be distributed or sold unless recycled materials are used.

“CE emphasizes resourcing over recycling,” Kitagawa said. This entails that products manufactured for use or consumption must undergo material recovery for recycling and waste management. These recycled materials and parts are resourced, either destined for the second raw materials market for manufacturing purposes or reused by the company for remanufacturing or refurbishing.

The other major trend is the integration of circularity strategies into the business value chain, which is part of the EU’s key Sustainable Product Policy or SPP, according to Kitagawa in a recent presentation.

The Sustainable Product Policy—the most important policy of the EU’s CE action plan—seeks to integrate circularity into the business value chain through designing products that are more durable and easy to repair and upgrade, and total life-cycle management.

 “Ultimately, companies have a responsibility to build and operate a total value chain management that incorporates product design and life cycle management systems that enable the systematic and continuous use of products and materials,” Kitagawa explained.

He added: “Through these efforts, both arteries and veins of a resource supply chain, which had been divided, will be integrated into the body of the business, making the most of the circular value of products and materials, creating a highly resilient value chain.”

In this way, since supply chain management is changing significantly from the traditional way, tracking becomes more important than ever. “This is because tracking data plays an important role in ensuring reliability and safety when using products and materials in a circular manner,” he continued.

These two CE trends are part of the EU’s ultimate objective of “decoupling,” which means creating economic systems that don’t depend on resource consumption and that separate economic growth from resource consumption.

Essentially, absolute decoupling is a “regenerative growth model that gives back to the planet more than it takes,” Kitagawa said.

MSMEs urged to use digitized financial tools

Micro, small and medium enterprises (MSMEs) are advised to utilize digitized financial tools to boost their efficiency while accessing financing they need to succeed.

Maria Isabel Ridad, founder of fintech platform Monetize, said digitization is not just a buzzword but a necessity.

“It starts with making your data readily available so it is there when you need it. But that’s not all. Automation also comes in to take care of those manual tedious tasks and take them off your plate to reduce errors and costs, minimize your cost from these errors. And then we added a layer of artificial intelligence (AI) to give you actionable business insights,” she told exporters.
 
Ridad said digitization accelerates business’ decision-making process –financials, revenue streams, expenses, disbursement to suppliers and employees, and unifies systems.

She said the Monetize is engineered with AI that minimizes errors and helps the MSMEs make smarter decisions faster.

“With Monetize, uploading your bank statements –whether manually or automated– the flow of funds is tracked, your disbursements and your collections, the inflow and outflow for your back account and payments to your suppliers, to your team, uploading of financial statement, so you can have immediate overview of where you are,” she added.

Apart from AI-based business advisory, Ridad said the platform has a marketplace for businesses needing to access financing.   

She said MSMEs do not need to approach traditional financial institutions and go through a very long application process.

“(So) Monetize is not just about adopting another business tool. It is about embracing a comprehensive future-proof solution especially designed for MSMEs. It is about embarking on a transformative journey to digitize your business, make smarter decisions and ultimately drive sustainable growth,” she added. 

Millennial health, wellness trends cited

WGSN, the world’s leading consumer trend forecaster, has cited opportunities across food, drinks and snacks to help millennials achieve their health and wellness goals as they age.

Katharine Schub, WGSN Food and Drink Strategist, said convenient lifestyle diets and multi-gen wellness are among the key trends in 2025.

“Aligning with our Restorative Guardians, draw on Millennials’ interest in niche diets while offering products that fit into their routines,” she said in a sample report.   

Schub said millennials are following specific diets, with plant-based, vegan, grain-free, gluten-free or FODMAP(fermentable oligosaccharides, disaccharides, monosaccharides and polyols) top of mind.

“As functional foods continue to interest this cohort, make products more accessible with ingredients from consumers’ pantries and kitchens,” she said.

On meals and snacks, the report urged businesses to partner with niche nutrition influencers on branded meals that make it easy for consumers to adhere to specific diets.

They can also offer fresh-prepared or frozen meals with short ingredient lists and no added sugar or develop drinks that feel more nourishing by highlighting whole-food ingredients.

“Make ingredient lists the focus of a product’s branding,” it said. “Display certifications on pack(s) (such as organic, non-GMO) to boost health credentials.”

Schub further said millennials also seek multigenerational healthful products as some of them have caregiving responsibilities for both children and parents or older relatives.

She said 90 percent of US millennials are willing to purchase protein powder containing ingredients made with precision fermentation.

“Explore advanced protein fortification across categories,” she added. “Make fiber, specifically prebiotic, more approachable via fun and kid-friendly textures and flavors.”

Schub further said brands can draw on global and nostalgic comfort foods rooted in millennial childhood.

“Develop products that can be personalized across different household members,” she said. “Create DIY (do-it-yourself), build-your-own meal kits to offer engaging activities for parents and their children.” 

Indonesia promotes local products in Cambodian & Import-Export Goods Exhibition 2023

The Indonesian Embassy in Phnom Penh participated in the16th Cambodian and Import-Export Goods Exhibition (CIE) held at the Koh Pich Exhibition and Convention Center, Phnom Penh (15-18/12). CIE is an annual international trade exhibition organized by the Ministry of Commerce of Cambodia.

Through the Indonesian Pavilion, the Indonesian Embassy in Phnom Penh promoted Indonesian export products, ranging from food and beverages to herbal medicines and batik. With a total area of 108 square meters consisting of 10 booths, the Indonesian Embassy in Phnom Penh became the foreign representative with the highest number of booths.

Ambassador Santo Darmosumarto of the Republic of Indonesia in Phnom Penh expressed hope that the concrete participation of the embassy could encourage an increase in Indonesian product exports in Cambodia.

Ten Indonesian companies and distributors in Cambodia participated in the exhibition, including PT. Dami Sariwana (herbal medicine manufacturer), K-1000 (distributor of Indomie and Teh Botol Sosro), Kino Cambodia, Chhivtimex Group (distributor of PT. Eagle Indo Pharma), V-Consolidated Co. Ltd (distributor of Inaco Jelly Drink), DK Enterprise (distributor of PT. Dolphin Food & Beverages Industry), Khmer Richie Foods (Distributor of PT. Serena Indopangan and PT. Siantar Top), Chip n’ Rolls (distributor of PT. Manohara Asri), as well as Golden Pearl and Manira (distributor of Indonesian batik).

The participation of the Indonesian Embassy in Phnom Penh in the 16th CIE is an ongoing effort to promote and increase Indonesian product sales in Cambodia. In addition to products from PT. Dami Sariwana, all the products displayed in the exhibition have entered Cambodia and are available for purchase in markets, minimarkets, and supermarkets.

To read full article, click here.



Author: Indonesia Embassy in Cambodia

Source: Khmer Times

Positive outlook: Businesses expect surge in demand

Micro and large-sized companies reported expectations of better business conditions in October 2023 compared to the previous month in terms of the index by business size.

Generally, these businesses felt positive regarding their performance with expectations of more activities and increased customers from higher demand for goods and services.

Meanwhile, medium-sized companies indicated slight pessimism with expectations of lower domestic spending due to people travelling overseas. Small-sized businesses reported similar business conditions in October 2023 to the previous month.

These details were revealed yesterday in Brunei Darussalam’s Business Sentiment Index (BSI) for October 2023 published by Brunei Darussalam Central Bank (BDCB).

The index is based on surveys conducted on over 500 micro, small, medium and large businesses from 11 economic sectors in the Sultanate across all districts.

The monthly index is designed to measure the level of business confidence/sentiment in the country covering various aspects, including current and future business conditions investments employment of workers, as well as costs of running the businesses. The BSI serves as a leading macroeconomic indicator with its forward-looking element in the country.

Source: Borneo Bulletin

Read the full article here

BSB ranks 4th in ASEAN in quality of living for expats, says report

Bandar Seri Begawan was fourth highest ranked city in Asean after Singapore, Kuala Lumpur and Johor Bahru in the Mercer’s 2023 Quality of Living report published recently.

According to the report, Singapore was the highest ranked city in ASEAN at 29th out of 241 destinations. Kuala Lumpur and Johor Bahru in Malaysia ranked 89th and 107th place.

The Sultanate’s capital Bandar Seri Begawan is at 112th place, falling from its 106th ranking in 2019.

Meanwhile, Bangkok, Thailand ranked 124th, Manila, Philippines ranked 135th, Jakarta, Indoneisa 148th, Hanoi, Vietnam 167th, Vientiane, Laos 180th and Yangon, Myanmar in 226th.

Globally, Vienna ranked first in the report for providing a high quality of living for international employees in 2023.

The Mercer’s Quality of Living data assesses the practicalities of daily life for expatriate employees and their families in assignment locations worldwide.

According to the report, following years of unprecedented and unpredictable times, the factors that influence the world’s economy have a direct impact on the quality of living.

“The current global landscape is affected by geopolitical turmoil, natural disasters and other economic challenges, all of which have significant implications for cities and their ability to attract and retain talent,” said Mercer’s global head of mobility Yvonne Traber.

Source: Borneo Bulletin

Read the full article here

Japan’s NTT Group keen to invest in Cambodia’s telecom sector

Japanese telecommunications company, NTT Docomo Inc., member of the world-renowned Nippon Telegraph and Telephone Group (NTT Group), has expressed the company’s desire to invest in the Cambodian telecommunications sector.

The company’s intentions cropped up during a meeting between President of NTT Docomo Inc., Li Motoyuki and Prime Minister Hun Sen on the sidelines of the ASEAN-Japan Commemorative Summit for the 50th Year of ASEAN-Japan Friendship and Cooperation on Tuesday evening.

In the course of the meeting, Li appraised Mr Hun Manet and members of the Cambodian Chamber of Commerce (CCC), on the company’s telecommunications activities in Japan and internationally, which include the provision of 4G and 5G services, satellite and mobile systems.

Li also detailed NTT Docomo’s partnership with NTT Group to research and develop 6G technology for future rollout and expressed the company’s intention to expand its investment in Cambodia.

Mr Hun Manet welcomed the investment suggestions made by NTT Docomo Inc. in the telecom sector saying the Royal Government of Cambodia has mandated the prioritization of the nation’s digital economy development.

This is as stipulated in the Government’s Pentagonal Strategy Phase I for Cambodia’s socio-economic development, he said.

To read full article, please click here.


Author: James Whitehead

Source: Khmer Times

Integration into GVCs brings huge gains for developing economies: WTO report

Amid recent global shocks to international trade, global value chains (GVC) continued to expand and demonstrate resilience and sustainability in 2022, benefiting more developing countries in the process, according to a new World Trade Organization (WTO) report.

The report titled “GVC Development Report 2023: Resilient and Sustainable GVCs in Turbulent Times” notes that international production networks remain a central part of globalization despite mounting pressures. Foreign inputs comprised a record-high of 28% of global merchandise exports last year. Moreover, GVC participation rates of almost all economies were higher in 2022 compared to their pre-pandemic levels in 2018.

This bodes well for spreading the benefits of trade to more firms, workers and developing economies, according to the report jointly published with the Asian Development Bank, Institute of Developing Economies-Japan External Trade Organization, and Research Institute for Global Value Chains.

However, the study also warns that ongoing global shocks, including the Russian war in Ukraine, lingering COVID-19 pandemic effects, and US-China trade tensions threaten to derail this trajectory.

At the same time, the GVCs’ intricate networks of international flows of goods, services, capital, and technology currently face exceptional challenges arising from the impacts of climate change.

Moreover, the paper finds that the export value and share of potential bottleneck products—products that are exported by very few economies—has more than doubled since 2000, from 9% to 19% of total trade, contributing to the vulnerability of GVCs. Also, there has been considerable concentration in sources of foreign inputs. In addition, US-China trade tensions have led to an increase in the number of stages in GVCs from 2018 to 2020.

These troubling developments underline the need to assess the potential vulnerable points of GVCs to shocks, stresses the study issued on November 16.

The report emphasizes that GVCs can drive inclusive development in developing economies by improving productivity and alleviating constraints and can result in higher wages and better working conditions.

“GVC integration leads, on average, to better outcomes for firms and workers in developing economies. The evidence consistently shows that local suppliers to MNCs and firms exporting intermediates outperform other firms in developing economies,” it says.

In particular, GVCs provide micro, small and medium enterprises (MSMEs) with chances for quality upgrading, knowledge spillovers, technology transfers, and innovation through their affiliations with lead firms. In this regard, firms in developing economies with higher GVC integration tend to have substantially better management practices. Furthermore, becoming part of GVCs can assist in alleviating credit constraints, a substantial challenge encountered by MSMEs.

The benefits spill over to workers as well. Being employed at MNCs or their suppliers generally results in higher wages and better working conditions, including a higher likelihood of formal employment. Women often benefit from these developments in particular.

These findings have important policy implications, declares the report. “Since GVC integration tends to benefit firms and workers, the focus should be on facilitating entry into GVCs and spillovers to the domestic economy to ensure that GVCs are truly inclusive.”

Online training channel helps ASEAN SMEs trade overseas, grow business

More entrepreneurs in the ASEAN region, whether those just starting in international trade or looking for additional  channels to grow their business in new markets, can access an online training channel free of charge.

Wachira Kaewkor, Deputy Director General of the Office of Small and Medium Enterprises Promotion (OSMEP) from Thailand, said that as the ASEAN Access Network grows, features of international trade support services need to be updated to enable businesses to meet the growing demands. 

Kaewkor said international trade support services should cover all areas that are relevant for cross-border trade, including skill building and knowledge sharing.

“This is why, today, the ASEAN Access Network is launching ASEAN Access LEARN to help even more ASEAN businesses to trade internationally. International trade is a key driver of business growth,” he said on Nov. 23.

He added these ASEAN businesses need to be equipped with knowledge particularly about import, export and e commerce.

Reinhold Elges, Country Director of GIZ Thailand, said SMEs need to understand the local traditions, market entry conditions and barriers to be successful in the global arena. 

Elges said ASEAN Access LEARN will organize live online training sessions in English and self-study courses on commerce and international trade taught by experts from ASEAN and around the world.

“LEARN brings new knowledge to your doorstep. LEARN means knowledge is literally at your fingertips and there is no need to spend time and money on travel to access it,” he added.

In cooperation with GIZ Thailand, the ASEAN Coordinating Committee on Micro, Small and Medium Enterprises (ACCMSME) and the OSMEP officially launched the online training channel under ASEAN Access.

Launched in June 2021, ASEAN Access https://aseanaccess.com serves as a “one-stop shop” for ASEAN SMEs who look to do business within the region beyond their country borders.

Updated OECD guidelines compel adoption of responsible business practices

It is high time Philippine businesses of all sizes and in all sectors adopt responsible business conduct (RBC) as a way to build organizational resilience as more and more governments impose measures enforcing good business practices, according to a management expert.

Dynah Avigail Basuil of the Asian Institute of Management (AIM) in a webinar said RBC is particularly crucial for exporters to the European Union (EU) with the recent publication of the revised “OECD Guidelines for Multinational Enterprises on Responsible Business Conduct.”

The updated Guidelines, published in June 2023, are recommendations addressed by governments to multinational enterprises. They aim to encourage enterprises to make positive contributions to economic, environmental and social progress, and to minimize adverse impacts that may be associated with an enterprise’s operations, products and services.

The Guidelines cover all key areas of business responsibility, including human rights, labor rights, environment, bribery, consumer interests, disclosure, science and technology, competition, and taxation, said Sarah Reso of the Organisation for Economic Co-operation and Development (OECD) in the same forum conducted recently by the Department of Trade and Industry’s Export Marketing Bureau.

The 2023 edition of the Guidelines provides updated recommendations for responsible business conduct across key areas, such as climate change, biodiversity, technology, business integrity, and supply chain.

Basuil, who is the executive director of the AIM’s Ramon V. Del Rosario Sr. Center for Corporate Responsibility, said RBC goes beyond just complying with the law but should be “part of core business and risk management, including in the supply chain and business relationships.”

She added that the Guidelines recommend that enterprises conduct due diligence in order to identify, prevent or mitigate actual and potential adverse impacts and account for how these impacts are addressed. This involves a six-step cyclical process:
Embed responsible business conduct into policies and management systems
Identify and assess adverse impacts in operations, supply chains and business relationships
Cease, prevent or mitigate adverse impacts
Track implementation and results
Communicate how impacts are addressed
Provide for or cooperate in remediation when appropriate
Basuil underscored that RBC is a must for exporters to the EU because all companies in the region are already being directed to undertake due diligence across all of their supply chains.

“So if you are an exporter and you’re exporting to a company that’s based in the EU, you are part of that due diligence, and your clients that are based in the EU have to ensure that you as a supplier to them are incorporating responsible business practices,” she said.

EU-based companies that have suppliers that don’t meet those standards are going to be penalized, she continued.

The executive said the EU Generalised System of Preferences+ (GSP+) program, of which the Philippines is a beneficiary until 2027, is one of the EU policies that support sustainable development and good governance by slashing tariffs to zero.

“This is a good opportunity for exporters to not just improve in terms of their competitiveness but also be able to sell their services at a much more competitive pricing because relative to the domestically produced ones, our products don’t get taxed. There’s no tariff when it comes to exporting to the EU as a result of this GSP+ revolving around the Philippines’ commitment to the RBC,” said Basuil.

She also urged exporters to see the benefits of the OECD Guidelines, noting how they compel the Philippine export industry to improve organizational practices and build resilience to be able to enter these markets while also contributing to Philippine economic development.

Industry players urged: Embrace AI tech to improve packaging operations

Packaging industry players should proactively embrace artificial intelligence (AI) technologies and invest in research and development to improve various aspects of packaging operations from optimization to design.

“AI has already infiltrated nearly every aspect of the packaging supply chain. Brands and package manufacturers are marrying materials, components, and insights with AI to create next-generation purchase, use, and end-of-life experiences,” David Luttenberger, Global Packaging Director at Mintel Group Ltd., said during the Usapang Exports organized by the Department of Trade and Industry-Export Marketing Bureau.

Luttenberger said AI technologies such as machine learning and robotics automation can analyze vast amounts of data from multiple sources in real time to consistently optimize supply chain operations.

“AI is bringing intelligence to pack design by rapidly evaluating design elements, resulting in design solutions that are efficient, user-centric and visually appealing,” he said, adding this replaces time-consuming and expensive traditional consumer research.

Luttenberger said AI is being used to rapidly create, package and target demographically specific product innovations.

It is likewise utilized for waste identification and sorting to improve recycling quality and efficiency, he said.

“By using machine learning algorithms, it is expected that the system will identify different types of packaging materials -for example, separating food packaging from non-food packaging- thereby improving recycling efficiency and reducing contamination,” he added.

Luttenberger recommended the packaging industry to collaborate with AI experts to leverage the full potential of AI technologies in improving operational efficiency, quality control, supply chain optimization and sustainability practices.

He said industry players need to approach technology logically as they also take accountability for social issues.

Luttenberger underscored the need to use technology and packaging to create brand harmony to enable consumers see how this benefits their life and get the real value for their money.

”Sustainability is about more than recycling and reducing plastic. For brand and package manufacturers, accountability for land and water use, job creation, equitable pay, inclusion, hunger and poverty will be as important as the product and package,” he said.

Luttenberger said navigating tough economic times will also require package manufacturers and brands to collaborate and use resources wisely.

“Succinct messaging will enable consumers to discover the tangible benefits of products and understand measurable packaging attributes,” he added. 

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