Another crisis casualty: big business struggles

to avoid financial losses 

 

Stable companies in the houseware and furniture export businesses with track record spanning 20 years have closed shop, with some of them trying to avoid incurring huge financial losses on account of a serious global economic crisis.  

 

“Around five bigger companies in my circle of 30 have decided to fold up not because they are losing but because they do not want to lose,” bared Dennis Orlina, chairman of the advocacy committee of the Philippine Chamber of Handicraft Industry (PCHI).

 

“The economic projection is not very good…They’re in the business for so long, they could not see any light at the end of the tunnel,” he noted.

Orlina said two of them closed their businesses after suffering losses amounting to P120 million for the first quarter of 2008 alone.  

He did not divulge the name of these exporting firms, but noted these are located in Cebu, Bicol and Manila.

 

However, Orlina said these companies have expressed plans to reopen their businesses once the economic condition improves.

 

On the other hand, he said, other distressed enterprises are implementing “belt-tightening” measures just to continue their operations.

 

“It’s a day-to-day struggle for a lot of people, it’s very difficult,” he said, noting that the weakening of the peso is not enough in enabling these companies to generate sales in this time of economic difficulty. 

 

“Although the peso devaluated, we don’t know for how long. And your costs have increased; gasoline last year was a lot cheaper than it is now,” he explained.

 

“When you lost your capital, how would you expect to get back tomorrow right away? The banks will not lend you money if you are losing. It’s a vicious cycle,” he decried.

 

Orlina said industry players expect this situation to linger until next year.

 

To ride out tougher times ahead, he cited the need to consider alternative markets, particularly Australia with 21 million consumers.

 

“Australia has a real estate boom for the past so many years, a market which can easily buy furniture and houseware products from us,” he said. “Our Australian buyers, partners and friends have always said that Philippine basket is very good in terms of design, niche but we have no market penetration there, very small.”