Banana exporters seek economic reprieve amid war

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MANILA, Philippines — Banana exporters have appealed to President Marcos to waive certain fees and defer minimum wage hikes to help them cope with the market disruptions caused by the escalating war in the Middle East.

In a letter, the Pilipino Banana Growers and Exporters Association (PBGEA) appealed to Marcos to provide the sector with “respite” from the economic shocks caused by the Middle East conflict and extreme weather events.

PBGEA proposed that banana firms be exempted from the recent minimum wage hikes in regions where fresh bananas for export are cultivated like Regions 10, 11, 12, 13 and BARMM to curb additional financial burden.

The group noted that the recently approved minimum wage hikes across the five regions ranging from P20 to P50 would put banana companies in a “more precarious” financial situation.

“The orders did not consider the fact that banana workers are paid more than the minimum wage with more or less P1,000 average daily labor cost or 80 percent more than required by law,” PBGEA chairman Victor Mercado Jr. said in the letter, a copy of which was obtained by The STAR.

Furthermore, the group recommended that export charges and fees imposed by various government agencies be suspended to cut the costs incurred by banana exporters amid market shocks caused by the Middle East conflict.

The proposed measures, PBGEA pointed out, would help Philippine banana exports to be more competitive in foreign markets amid logistical woes in the Middle East market coupled by supply challenges locally.

Some of the fees that PBGEA is seeking to be waived are penalty of lodgment error (P5,000 per error paid to Bureau of Customs), various wharfage fees ranging from P7.695 per cubic meter to P239.53 per 40-foot container, regulatory fee of P4 per metric ton paid to Bureau of Plant Industry and export license renewal of P5,000.

The banana industry continues to face supply challenges due to persisting pests and diseases problems at a time that demand for the commodity has been increasing abroad, especially in the Middle East, PBGEA said.

The group earlier estimated that banana exporters stand to lose almost $200 million in revenues due to trade disruptions in the Middle East as the war in the region escalates.

Some banana exporting companies have stopped shipments to the Middle East since the war in the region erupted.

Iran, the country’s fourth largest market for bananas, accounted for eight percent of banana export receipts last year, amounting to $97.52 million, according to the Philippine Statistics Authority (PSA).

Meanwhile, the combined export value of bananas to the six Gulf Cooperation Council member-countries plus Iraq last year reached nearly $95.5 million, based on PSA data.

The Middle East market accounted for 12 percent of total banana export value last year. Revenues from banana exports to Middle East market last year expanded by 60 percent to $193 million from $120 million, driven by increased shipments in most countries except Kuwait and Oman.

Beyond the Middle East market, banana exporters are also feeling the market shocks caused by the Gulf war with higher freight costs in Asia, PBGEA executive director Stephen Antig told The STAR. Citing data from a member of PBGEA, Antig said the freight costs for a 40-foot container has tripled to $9,000 from $3,000.

Banana exporters are caught in a bind as they are unable to raise prices in key Asian markets like Japan and South Korea since foreign consumers are already reeling from higher food costs, Antig said.