Competitive Priorities

in the
Furniture Industry of the
Philippines

The Philippines is known for making
quality and artistic furniture. It is one of
the industries that made it to the global
market, The country ranks as one of the
worlds best producers of fine furniture.
But apparently there has been a decline in
the furniture business in the country.
The competition in furniture industry has
increased worldwide because of more
countries are willing to trade.
According to Jose Ramon Abad The
Philippines is now the worlds best
producers of fine furniture. (2012)


The furniture industry of the Philippines is
one of the top exports industries in the
country. It has large impact of socio-
economic condition of the Philippines as it
is the major source of livelihood for
Filipinos all over the country.
Over the years, export furniture
production in the phillippines rapidly
evolved. Philippines furniture is one of the
priority export products given assistance
and support by the government.
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Expanding its scope to become Asias
acknowledged leader in making high
quality furnitures products. The furniture
industry manufactures affordable
products of delicate craftsmanship which
is the successful result of modern
technology combined with human
creativity and eye for beauty.


Italy is the top exporter of furniture to
the United States from Europe. Italys
furniture manufacturing was force to
export the lumber required for
production. One of the success factors
of Italian furniture manufacturing is the
pricing policy applied by furniture
manufacturers in spite of raw material
cost increases.
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Major furniture manufactures are located
in three areas: Manila, Pampanga and
Cebu. The furniture industry is forecasted
to grow by 10% due to a boost in the
construction industries and several tie ups
with the real estate industry. BPOs are
even encouraging demand for furniture
and produce high quality furnishings that
can cater both local and foreign markets.

Ghana is a relatively small sub-Saharan
African emerging economy. Their
manufacturing companies struggled
because they could not acquire the raw
materials needed for their production due
to scarce foreign exchange reserves. In
order to address the concern the economic
liberation policies had nurtured an open
economy and minimize problem of the
manufacturing companies to obtain raw
materials and inputs and other resources.


Despite the improving business climate,
the Philippine furniture industry is faced
with the threat of declining revenues due
to the ASEAN Integration happening next
year. With free trade among ASEAN
members, the industry might be force to
drive down prices or even shut down
operations.
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Also a chance that local furniture
manufacturers would relocate to other
ASEAN regions with cheaper raw
materials and labor. Lastly, the
Philippines have barely touched the
ASEAN market; most of its exports are to
the European nations and the United
States. The Philippines is at a huge
disadvantage because other ASEAN
countries, like Vietnam and Indonesia,
have already penetrated the market.

According to the report, the furniture sector
particularly exporters, remains under intense
global and regional competitive pressures. A
global downward price pressure influenced by a
weakening dollar and stiff competition from
Vietnam and China.
Philippines export of furniture for the past
years( 1999 to 2003) were declining. The
problem concerns in the difficulty in
having a competitive price of the products
for export.

9/2/2014

According to the Chamber of Furniture
Industries of the Philippines there are
major concerns about the furniture export
industry. The concerns are the lack of
supply of raw materials, lack of financing
opportunities for the small micro-
entrepreneurs (SME), high labor cost, lack
of information, low productivity as well as
the political, economic and peace and
order situation in our country.
The reason to study the furniture industry
is to be aware of what is its latest
competitive trend in the global market.
By studying the competitive priorities of
the furniture industry in the Philippines,
researchers hope to understand the
industry a lot better and suggest
improvements for the benefit of local and
national furniture manufacturers in the
country for the growth of the Philippine
economy and for enhancing the industrys
competitiveness.
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Through this study the furniture sectors
will be able to explore the proper
management and supply agreements from
other countries to address the problem of
lack of raw materials as well as the idea of
financing the SMEs that will help
increasing their productivity.
Having this study the challenges to
maintain our edge in human capital
aspects will be addressed through
educating relevant skills and training in
furniture making.
9/2/2014
Group Members;
Mary Grace
Guerra
Zyrabelle
Sumatra
Jean Rhea
Bisnar
Sheena Mares
yap
Bernadeth
Mahinay
Gleza Esonsa

Jameselle
Dwight Gorne
Carmel
Quarteron
Johay Saripada
Edward
Esclamado