Sergio R. Ortiz- Luis Jr. Championing the Export Industry

October 23, 2019
Sergio R. Ortiz- Luis Jr.
Sergio R. Ortiz- Luis Jr.

The words of the late and former Trade and Industry Secretary Rizalino S. Navarro during the First National Export Summit in July, 1994 sums up the influential impact of the Philippine Exporters Confederation, Inc. (PHIL-EXPORT) on the national governance since then.  Much of this is attributed to the vision and leadership of its President, Sergio R. Ortiz-Luis Jr. whose pro-active advocacy on issues affecting export promotion and development has resulted in reforms and benefits to the export and the business communities.

PHILEXPORT, indeed, has become a crucial part of nation building, embodying the contribution of the organization to the country’s development and its formidable presence in the global economic front. Since its founding some 30 years ago, PHILEXPORT has become the ambassador of goodwill of a unique sector. Its presence has been felt and its contribution to the country’s economy recognized as it actively pursued its vision and mission that seek to help uplift the country’s economic agenda. Thanks to the man who believes in the power of the human spirit and the man who is willing to defy convention so that their voices could be heard and the interest of both the government and the private sector can both be upheld.

Much of PHILEXPORT’s recent accomplishments can be attributed to the vision and leadership of its president, Sergio R. Ortiz-Luis Jr., whose pro-active advocacy on issues affecting export promotion and development has resulted in reforms and benefits to both the export and the business community. His principle is simple: to protect the interest of a unique sector that stands as one of the pillars of the country’s economic growth while working hand in hand with the government towards the attainment of a common goal.

This advocacies gained momentum with the issuance of two significant government policies. Proclamation No. 167, issued by President Fidel V. Ramos in 1993 “Declaring Export Development as the Key to Philippine Balanced Agri-industrial Economic Growth to the year 2000,” and Republic Act No. 7844, known as the “Export Development Act (EDA) of 1994: an Act to Develop Exports as a Key Towards the Achievement of the National Goal Towards the year 2000,” define PHILEXPORT’s full potential as key partner of the government towards growth and development.

Ortiz said, it was not easy instilling the game changing impacts of a robust export industry on an economy. “We only have to consider the success models of our Asian neighbors which single-mindedly poured resources to develop its micro, small and medium-sized enterprises (MSMEs) which comprise the bulk of exporters,” he said. The same is true today nearly three decades since this export advocacy has started. In the Philippine context there remains some nuisances that prevent the industry from maximizing the benefits of a more liberalized global trading scheme which PHILEXPORT had been advocating. “Other than the obvious challenges on raw material availability and transportation costs, exporters also have to deal with issues such as human resources, environment, corporate social responsibility, governance at the national and local government levels, taxes and even politics because all these affect our global competitiveness,” he claimed. These, of course, are the reasons why PHILEXPORT remains vigilant to ensure that the country would gain foothold in the international market.

With 20 chapters scattered all over the country and servicing at least 35 organizations, PHILEXPORT has been able to gather their thoughts to provide them better services and ensure that each members are connected to each other.

“It is not easy running PHILEXPORT whose members are scattered nationwide and are faced with communication and geographic barriers, but we need to keep our line open so that we could hear from them and them from us,” he said. “Thanks to the advent of a more modern technology, we can now easily be heard in raising our issues and positions,” he said. “The world wide web and its most common frontrunners the Facebook, Twitter and Instagram, became our most common ally in sending the message across,” he said.

“While we continue to use traditional communication channels for government and private sector stakeholders, the value and reach of social media cannot be ignored. Even Cabinet members and legislators are active on social media. Though obviously, we have to choose our battles and battleground well,” Ortiz said.

Business and Beyond

Relevant to this, PHILEXPORT is back on national television since 2016 through an advocacy program called Business and Beyond.  To be aired every Saturday at 9 p.m. on GMA News TV, it is now on Season 4 where it will tackle the Global Megatrends affecting today’s businesses and economies.  It is a joint project with the Philippine Chamber of Commerce and Industry (PCCI) and produced by ACA Raise Productions.

“We have interviewed and featured a number of Cabinet members, CEOs and owners of enterprises on relevant best practices, issues and interventions. It is a niche program focused on business and trade advocacies as opposed to the daily news updates by others. It is quite a struggle to make such format sustainable, but this is part of our mandate. We intend to support it within what our resources will allow,” he explained. PHILEXPORT, through its projects with United States Agency for International Development (USAID), had also produced a series on export promotion which lasted for 13 seasons in the mid-‘90s.

The Making of an Export Leader

Ortiz-Luis’s involvement with the export industry began in 1979. He was 20 years old when he joined a family corporation, ERMA Industries, one of the country’s biggest shrimp processors and exporters. It was a time when the Philippine shrimp exports, especially to Japan were the fastest, leading to the pioneering entry to the growing US market. In 1983, he became president of TOA Industries, another family corporation engaged in the fabrication of agricultural equipment and implements. This cemented his involvement in the agri-business sector that paved the way to leaderships in major industry associations such as the Agricultural Machinery Manufactures and Distributors Association (AMMDA) —1986 to 1989; Philippine Food Processors and Exporters Association (PHILFOODEX) —1989 to 1991, where he became the chairman from 1996 to 1997; the Association of Shrimp Producers and Exporters of the Philippines (SHRIMPEX) — 1992 to 1995 and later, TEAM Philippines, where he is one of the founding members.

Ortiz-Luis took the PCCI presidency in 2002 to 2003 and the Employers Confederation of the Philippines (ECOP) from 2007 to 2009. He became board member of many socio-civic organizations. He co-founded 117, a national emergency call number initiated by the Foundation for Crime Prevention, Inc. (FCP).

The Birth of PHILEXPORT

Gaining inputs and energy from joining business organizations, Ortiz-Luis found himself as “a voice in the wilderness.” For the man who have seen it all and felt it all, he said being at PHILEXPORT was not an easy job. “It was tough, it was tricky, sometimes disappointing that if you are not committed you would not stay,” he said.

He said when PHILEXPORT was starting, government policy was against exports and was in favor of domestic industries which was exhibiting signs of inefficiency and complacency. He started acting on his mandate by bringing to government attention various problems of the food and metalworks industries, as high costs of imported feeds, packaging materials, shipping and port tariffs, MSME 3 credit, and, most especially, monetary policies, were affecting foreign exchange rate and interest rates management.

From being a voiceless, fragmented sector, he engineered the transformation of the industry into a formidable economic agent of change and influence. He led the growth of exports from a moribund industry to a band of winners that now accounts for 30 to 55 percent of the country’s gross domestic product (GDP). The development and growth of the export community led to the increased capacities of industry associations to champion sectoral issues. It also facilitated the birth of new enterprises particularly MSMEs, including those from the services sector, to flourish and be sustained even through challenging times.

Ortiz-Luis’s break to become a national export leader came towards the end of the 80s when a World Bank (WB) Mission recommended the unification of exporters groups under one umbrella organization. Taking cue from this, Ortiz-Luis initiated the unification of two largest exporters groups — the Philippine Exporters Foundation (PEF), a resource-rich organization providing trade development services and operating two Common Custom Bonded Warehouses, and the Confederation of Philippine Exporters (COPE), which has broader membership and political clout. On Oct. 25, 1991 the Philippine Exporters Confederation, Inc. or PHILEXPORT was born.

A Formidable Force

The umbrella group evolved as a formidable force, politically and financially, with bigger membership base and beefed up by profitable operation of its customs bonded warehouse to serve its MSME-member exporters. With government and private sector representatives sitting at the board, PHILEXPORT became the country’s leading export organization. Up to this day since 1992 Ortiz-Luis has been re-elected every two years as its president.

PHILEXPORT reaches out to over 4,000 members and millions of dependents through its 20 provincial and regional Chapters and 35 industry affiliates. These business support organizations offer customized services at subsidized rates from PHILEXPORT’s robust financial resource. Through the years of providing service to both members and non-members, PHILEXPORT’s network, goodwill and resources have expanded under his leadership. Ortiz-Luis’s engagement in various sectors opened opportunities for PHILEXPORT in local, international and civic organizations and institutions, as well as in government private sector Councils that are involved mostly in policymaking.

Export and Trade Initiatives

Among the first and active Councils that foster private public partnership is the Export Development Council (EDC) created by Executive Order No. 98 in 1993. It is the highest policy-making body of the export industry. The success of this partnership was recognized in 1994 when the EDC was institutionalized and given legal mandate under the Export Development Act to oversee the implementation of the Philippine Export Development Plan and coordinate the formulation and implementation of policy reforms to support it. Nine of the 17 members of the EDC come from the private sector, nominated by PHILEXPORT as the Accredited Export Organization, ensuring full and solid private sector representation in the EDC.

Ortiz-Luis has been the vice-chairman of the EDC since 1995 and the chairman of EDC’s Networking Committees on Financing and Foreign Exchange. As the committee chairman, he took an unrelenting position in the adoption of an internationally competitive exchange rate; spearheaded the development of MSME Financing programs such as the “Tulong sa Exporters Program Phase 1 (TSEP1) Financing Program”; and facilitated the launch by the Philippine Export and Foreign Loan and Guarantee Corporation (PHILGUARANTEE) of the export credit guarantee in 1997. The EDA also provided impetus for the establishment of the World Trade Center Metro Manila, which was built in cooperation with the Manila Exposition Complex, Inc. and the Department of Trade and Industry (DTI). In two to three years, an office building-condotel and a 5-star hotel will rise on the same complex as part of the EDA vision.

Expanding Export and Trade

One of the ultimate goals of PHILEXPORT’s advocacy program is to turn Philippine industries and enterprises into becoming globally competitive. To determine the benefits and challenges of the ASEAN Free Trade Agreement (AFTA), PHILEXPORT, through various projects of the USAID, supported the conduct of many relevant studies, including the one on Optimizing Philippine Gains to Regional Trading Arrangements which was used to develop a strategy to maximize the gains in AFTA. PHILEXPORT, likewise, led the private sector groups that supported the Philippine accession to the World Trade Organization (WTO) which was ratified by the Senate in 1994.

Ortiz-Luis was also involved in the establishment of the BruneiIndonesia-Malaysia-Philippines East ASEAN Growth area (BIMP-EAGA); supported the completion of the ASEAN Free Trade Agreement (AFTA); and played as one of the leading business leaders’ hosts to the Asia-Pacific Economic Council (APEC) Leaders Meeting in 1996.

The support of PHILEXPORT has not been limited to exports. Still under the leadership of Ortiz-Luis, PHILEXPORT took the lead role among business organizations in the country advocating for the liberalization of investments. Among the sectors covered included banking, telecommunications, transport and retails sectors, justifying the expansion of export processing zones.

Ortiz-Luis also championed the promotion of the franchising sector, supporting technical studies and international conferences on franchising, which saw the sector mushrooming not only in product-based ventures but also services, giving rise to hundreds of new business opportunities. Samie Lim, past president of the Philippine Retailers Association (PRA), has dubbed him the “godfather of the franchising industry” because of these contributions.

Firm Believer of Economic Dispersal

Back in the 1980s, business was heavily concentrated in Metro Manila and nearby Luzon, leaving the South generally ignored. PHILEXPORT’s USAID PITO- Projects made Cebu City and Davao City as the principal beneficiaries of advocacies to establish new regional growth centers. His regional development philosophy has also translated into the regional expansion of PHILEXPORT. Working with industry associations exposed Ortiz-Luis to the bigger realm of national economy and development agenda and programs, together with social and civic issues and activities that impact on business and exports. The associations’ advocacy and promotions programs were implemented with national government agencies, private organizations, media, academe and NGOs. Any successful advocacy, development and promotions programs and projects achieved translate to faster turn-around time for exports, higher productivity for the company, industry and workers, enhanced goodwill from buyers and international partners and more stable industry for the stakeholders. Advocacies for productivity and efficiency are implemented at the enterprise and sectoral levels to ensure that the workers share the vision and are equipped with the appropriate skills and work attitudes. This requires that Ortiz-Luis as exporter and industry leader, also be concerned with labor issues and benefits, including industry impacts on communities, families and civic groups as part of his social responsibility.

Future Directions

His main concern now is how exports can be sustained, even as Philippine exports have been among the fastest growing in Asia since 1996 and has grown about three times faster than the country’s GDP in the past decades. Operating in a knowledge and technology-based global trading environment, Philippine exports and trade face more intense competition. At the same time, national borders are disappearing as globalization brings all nations under a virtual single roof. As PHILEXPORT and other business organizations work with government to implement the various development plans, the more meaningful impact of all these work can be found in the new and existing enterprises especially exports that flourish through difficult times; the employment provided by MSMEs and their value chains; the international goodwill that the Philippines has; and the hope for Filipinos to be a developed country and enjoy the benefits for generations to come.

“Exports will remain to be any country’s best bet for development and progress. For the Philippines, this can only happen if we believe and act on this together,” he said.