Shoemakers fear FTA
By Cherry Ann T. Lim Of Sun-Star Cebu
3 March 2008
Carcar City’s shoemakers are looking with dread at 2010, the year the Association of Southeast Asian Nations (Asean)-China Free Trade Area is set to be created.
The initiative aims to build a huge trading bloc with a free flow of goods, services and investment in an area with a combined population of nearly two billion people.
While the move, which will drop tariffs, may make goods more affordable to consumers everywhere in the trading bloc, Carcar’s shoemakers worry that their undercapitalized industry, already suffering from an onslaught of cheap shoes imported from China, will just get trampled upon further.
Titing Canape, a trustee of the Carcar United Footwear Manufacturers Association Inc. (Cufmai), told Sun.Star Cebu last Tuesday that it is difficult for Carcar shoemakers to compete with Chinese manufacturers because the latter have the advantage in terms of the sourcing of raw materials.
He said the synthetic materials used by Carcar shoemakers are bought in China by their suppliers. Other raw materials come from Korea.
Sourced within the Philippines are wood for the soles and cows’ skin, which is produced by a tannery in Bulacan.
Elias Tecson, division chief of the industry development division of the Department of Trade and Industry-Cebu Provincial Office, confirmed the troubles of the Carcar shoemakers.
“(The) Marikina (shoe making industry) is not a threat. The problem is the shoes from China,” he said during the DTI 7 and Department of Tourism 7’s One Town, One Product (Otop) familiarization tour of Talisay City, Carcar City, Argao and Minglanilla towns for Cebu tour operators and tour guides.
The DTI has been assisting the Cufmai.
Through President Arroyo’s “Isang Bayan, Isang Produkto, Isang Milyong Piso” program, Cufmai got a P1 million loan, which it used to buy raw materials in bulk, Tecson said.
The loan, which has been fully paid, enabled the shoemakers to reduce the cost of their materials by 40 percent, he said.
The DTI also sponsored a pattern-making seminar for the shoemakers and helped Cufmai members to join national trade fairs.
There are about 1,500 footwear manufacturers in Carcar, but only 18 are currently members of Cufmai, Tecson said, because the DTI wants to limit the members only to those legitimate manufacturers who have registered their business names with the DTI, pay taxes to the local government and are able to follow the by-laws of the association.
In response to the perennial problem of lack of capital, the DTI has also introduced the shoemakers to lending institutions.
Shoes are the Otop product of Carcar.
Otop is a priority project of the Arroyo administration to promote entrepreneurship and create jobs. Under the project, local chief executives of each city and municipality take the lead in identifying, developing and promoting a specific product or service in their respective areas.
Started in 2006, Otop Philippines offers a comprehensive assistance package through a convergence of services from local government units, national government agencies and the private sector.
Cufmai’s Canape said Carcar supplies shoes to the Visayas and Mindanao, particularly big malls in Mindanao.
In Cebu, however, there is difficulty supplying to some malls because of the delay in which the malls pay the manufacturers for the sold shoes.
The consignment system also means that there is a slower turnover of cash for shoe manufacturers than in the outright sale system.
Technology has also gotten in the way.
Canape told Sun.Star Cebu of how a big mall no longer gave a paper list of the orders it wanted to make from the Carcar shoemakers. Instead, it put its orders in a CD, which the shoemakers could not open, despite the efforts of their most technologically savvy members.
Carcaranons try to look at the bright side, however.
The DTI’s Tecson revealed that some colleges, like the Southwestern University and the University of Cebu, now buy nursing shoes from Carcar.
During the DTI-DOT’s familiarization tour to Carcar, tour guides were taken to the display center of the shoe products of Cufmai members across the Acacia Grill and Restaurant.
While there, tour operators asked the Cufmai to provide an area in the center where tourists that they take there could observe how the shoes are made.
The tour operators said Europeans, in particular, enjoy looking at how products are manufactured as this would give more value to the products they see and encourage them to buy the products.
Tuesday’s familiarization tour represented the efforts of the DTI 7 to link Otop to the tourism market so that Otop products could be made available to tourists. Bringing tourists to the towns to see how local products are made also satisfies the need of local tour operators to offer their clients more meaningful tours.
Central Visayas is the pilot area in the country for the linking of Otop to the tourism industry.