PH could lose South Korea as banana export destination

As the government fails to convince Seoul to reduce its export tariff on Philippines' agriculture commodities, a group of businessmen fears the country could lose South Korea as a top export destination for locally produced bananas three years from now.

Officials of the Pilipino Banana Growers and Exporters Association (PBGEA) aired this warning as they pressed the government anew to work out a bilateral agreement with South Korea to remove the high 30 percent tariff on Philippine banana exports.

Based on their estimate, losing the Korean market, which is among the top three destinations for Philippine banana exports, would rob 32,000 workers and over 200,000 dependents in the domestic industry of their means of livelihood.

This will also result in estimated annual export revenue losses of close to $300 million and another 16.5 billion in foregone local and national tax revenues.

“Cheap banana imports from Central America have started to eat into the share of Philippine bananas in the Korean market and these could totally push us out of the picture by 2022 unless we get the same zero-tariff treatment as they do,” said PBGEA executive director Stephen Antig.

For his part, PBGEA president Alexander Valoria pointed out that the Central American countries of Costa Rica, El Salvador, Honduras, Nicaragua and Panama will benefit from zero import tariffs on the bananas they export to South Korea by 2021.

Peru is already enjoying zero tariffs on their banana exports to South Korea while Colombia will get the same treatment also three years from now.

Even Vietnam, a fellow ASEAN economy of the Philippines, will get to sell bananas to South Korea with zero tariff by 2021.

Paul Cuyegkeng, president of Sumifru Philippines Corp., said Filipino banana growers merely want a “level playing field” in competing with exporters from other countries not only in South Korea, but in Japan and China as well.

“We are talking about protecting the banana industry and saving jobs,” Cuyegkeng said.

“It would be highly ironic if we lose jobs in the banana industry which is mostly based in Mindanao when the main program of our President, who hails from this island, is job creation,” he added.

Valoria, who also serves as the president of Tagum Agricultural Development Corp., said while the Central American countries recently signed a free trade accord with Korea as a bloc, Costa Rica, El Salvador, Honduras, Nicaragua and Panama were also able to forge separate bilateral agreements with Korea in favor of their agricultural exports.

“This is the same level of support and action that we need to ensure that our fruit exports remain competitive in the fast-expanding Asian market,” Antig said.

“ASEAN has an existing free trade agreement with Korea, but we should negotiate separate bilateral deals like what the Central American countries did, so that the agreements are countryspecific and not regionalized.”