Doing business beyond Philippine shores

MOST people seem to see the Asean Economic Community (AEC) as something that our country, the Philippines, is not ready for, and will bring us great problems. The fact is, we are already more Asean-engaged than most people appear to think, and many Philippine businesses of various sizes are already reaping the benefits of doing business with our Asean neighbours.

It seems to me that the first hurdle we need to overcome is the self-defeating mindset that "we are not competitive enough", "we are not prepared" or "the government has not done anything to prepare us for the AEC".

An interesting new Department of Trade and Industry (DTI) publication, called Business Beyond Borders, features the stories of 20 Philippine firms - including large and small, and familiar and obscure ones - that have already been cashing in on the opportunities presented by the AEC.

Their stories ought to convince readers that we have long been ready and well positioned to benefit from the closer regional economic integration that the AEC represents. Of the 10 lessons gleaned by the publication from the featured stories, I'd like to highlight three.

First, there is growth in Asean. Those who have chosen to take an aggressive rather than defensive stance towards the much wider Asean market have moved ahead and demonstrated much greater scope for business growth than would be possible otherwise. Indeed, why be content with targeting 100 million Filipino consumers when the South-east Asian market is six times larger at more than 600-million strong?

Well-known fast-food chain Jollibee began reaching beyond our shores in 1987, when it started operations in Brunei; now, it is Asia's second-largest quick-service restaurant chain. Aside from more than 2,000 local branches, it now has 50 stores in Vietnam, 12 in Brunei, two each in Singapore and Cambodia, and 402 in China with which Asean as a group forged a free trade agreement (FTA) in 2010.

It is important to point out that Asean has collectively entered into bilateral FTAs with six major economies ("dialogue partners"), namely, China, Japan, South Korea, India, Australia and New Zealand. This has further opened preferential access to an even larger market of 3.5 billion consumers for our businesses, and Jollibee has been using this to good advantage.

So is Liwayway Marketing Corporation, maker of the popular Oishi snack food products. Besides its four manufacturing plants in the Philippines, Liwayway now also has four in Vietnam and one each in Myanmar, Thailand, Indonesia and Cambodia.

It even has a longer-standing factory network in China, where the company began operations more than 20 years ago in Shanghai. From China, Liwayway exports its products even farther overseas to Britain.

Second, smaller businesses and social enterprises have as much to gain from the AEC.

In 2012, a small company called Manila Catering made a presentation to chief executive Tony Fernandes of the Malaysian AirAsia Group to provide in-flight catering services, and bagged the deal. I've heard the company's owner speak of how her Malaysian partner shared good practices with her on the layout and process flow of her commissary kitchen, which greatly improved productivity and cost efficiency.

Today, the company provides in-flight hot meals for three airline companies serving Asean destinations from the Philippines. It has also become one of the few halal-certified food providers in the Philippines, giving it an important edge in serving the predominantly Islamic Asean market.

Social enterprises Human Nature and Great Women have likewise made successful inroads into Asean markets.

Human Nature manufactures beauty and personal care products using local organic ingredients. It started out in 2008, selling its products via online platforms. Its products are now distributed through major retailers, 30 franchisees and 40,000 dealers, and are exported to Singapore, Malaysia and, soon, Indonesia.

Great Women, or Gender Responsive Economic Action for the Transformation of Women, helps female micro-entrepreneurs from all over the country produce quality handicrafts such as bags and fashion accessories, as well as food products.

Their products received Asean exposure during a Global Women's Summit in Malaysia last year, and partnerships are being developed with Malaysia, Myanmar and Vietnam to promote wider reach and expand the benefits to more Asean women.

Third, contrary to perceptions expressed by some critics, various government programmes are actually in place to enable small and medium-sized enterprises (SMEs) to engage and benefit from the AEC. The national AEC Game Plan spells out various agencies' SME-oriented programmes and initiatives, many of which have been around for years.

A number of firms already actively doing business in other Asean countries attest to having been helped by programmes of the DTI, including skills training, shared service facilities and Doing Business in Free Trade Areas seminars, among others.

Beneficiaries range from the Tubigon Loomweavers Multipurpose Cooperative in Bohol, which produces home-grown textile products, to Nito Seiki, an original equipment manufacturer of auto and aerospace parts.

In interactions with many small exporting firms around the country, I have heard numerous accounts of how the DTI's and other government initiatives have helped provide the boost for them to get into the export markets.

It takes shedding the common inward-looking, defensive posture of many of our firms, in favour of an aggressive outward- looking one, to realise many of us are creating ghosts where we could otherwise be finding "gold mines".


A version of this article appeared in the print edition of The Straits Times on June 24, 2015, with the headline 'Doing business beyond Philippine shores'. Subscribe