Import & Export business

Philippine Business Environment 1st Semester 2010

 Importing Business
The term "import" is derived from the
conceptual meaning “as to bring in the goods
and services into the port of a country”. The
buyer of such goods and services is referred
to an "importer" who is based in the country
of import whereas the overseas based seller is
referred to as an "exporter".
 Types of Import
Industrial and consumer goods
◦ Industrial goods – goods that are produced for
industry, includes processed or raw materials,
and goods used to produce other goods,
machinery, components, and equipment.

◦ Consumer goods/Final goods – these are goods

specifically intended for mass market which are
for direct consumption. (e.g. food, clothing)
 Types of Import

Intermediate goods and services

◦ Intermediate goods/services – these are
goods/services that are used as inputs for
producing other goods such as partly finished
goods. (e.g. paint, plywood, OFW)
 Advantages of Importing

Introduction of new a product line

Top of the line products

May reduce the operational costs

 Disadvantages of Importing
Financial Risk
Political Risks
Operational Risk
Regulatory Risk
Cultural Risk
 Fastest-Growing Filipino Imports from
U.S.
Other commercial vehicles … US$1.4 million (up
1192% from 2005)
Civilian aircraft … $17.7 million (up 446%)
Military vehicles (e.g. armored cars & trucks) …
$3.6 million (up 268%)
Unmanufactured agricultural items … $12.4
million (up 258%)
Cookware, cutlery & tools … $14.2 million (up
256%).
 Barriers to Importation
 Trade barriers are generally defined as government
laws, regulations, policy, or practices that either protect
domestic products from foreign competition or
artificially stimulate exports of particular domestic
products. While restrictive business practices sometimes
have a similar effect, they are not usually regarded as
trade barriers. The most common foreign trade barriers
are government-imposed measures and policies that
restrict, prevent, or impede the international exchange of
goods and services.
 Exporting Business
Export strategy is to ship commodities
to other places or countries for sale or
exchange. In economics, an export is any
good or commodity, transported from one
country to another country in a legitimate
fashion, typically for use in trade.
 Advantages of Exporting
Enhanced domestic competitiveness
Increase sales & profits
Extension of sales potential of existing
products
Selling excess production capacity
 Disadvantages of Exporting
Lack of knowledge of Trade Regulations
Cultural Differences
Customer demand
Technology
Management mistakes
Top exported products by the Philippines
Coconut oil
Gold
Dried fish & shellfish
Metal components
Woodcrafts & furniture
 Philippine Exports to U.S.
Semiconductors & related devices …US$2.5 billion (25.3% of Philippine to
U.S. exports, up 4.8% from 2005)
Cotton household furnishings & clothing … $1.34 billion (13.8%, up
12.7%)
Computer accessories, peripherals & parts … $1.31 billion (13.5%, down
11%)
Non-cotton household furnishings & clothing … $605 million (6.2%, up
2.5%)
Automotive parts & accessories … $488.5 billion (5%, up 10.2%)
Furniture & other household items (e.g. baskets) … $277.7 million (2.9%,
down 5.8%)
Electric apparatus … $268.9 million (2.8%, up 0.3%)
Household items (e.g. clocks) … $245.7 million (2.5%, up 63.7.6%)
Fish & shellfish … $240.8 million (2.5%, up 2.8%)
Goods returned then re-exported ... $232.5 (2.4%, up 17.9%).
Fastest-Growing Filipino Exports to U.S.

Computers … US$88 million (up 417% from

2005)
Automotive tires & tubes … $23 million (up
393%)
Marine engines & parts … $2.6 million (up
333%)
Specialized mining & oil processing equipment
… $1.1 million (up 208%)
Miscellaneous material (e.g. hair & waste
material) … $2.9 million (up 135%).
Import & Export in the Philippines
NSCB - Statistics - Foreign Trade.htm