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Chapter 4
Region 2: Woodworks/Home Furnishings Industry Cluster
4.1 Overview of the Industry
4.1.1 Situationer
4.1.1.1 The Woodworks/Home Furnishings Industry in the
Philippines
Woodcrafts and Furniture ranked third among the top ten exports of the Philippines
during the first semester of 2009, with a share of 2.7 percent, but posting a decline of
18.9 percent to $461.61 million from $569.34 million in the first semester of 2008.
(Figure 4.1)
Figure 4.1 Philippine Top Five Exports: First Semester 2009 and 2008
Source: National Statistics Office
Table 4.1 Value of Top 10 Principal Exports: 2008 and 2009 (FOB value in million US$)
% Growth
Commodity 2009 % Share 2008 % Share Rate
Total Exports 17,221.48 100.0 25,622.58 100.0 -32.8
Top 10 Exports 12,695.12 73.7 19,421.96 75.8 -34.6
Electronics 9,758.73 56.7 15,137.81 59.1 -35.5
Apparel/clothing 764.80 4.4 991.56 3.9 22.9
Woodcrafts & furniture 461.61 2.7 569.34 2.2 -18.9
Cathodes 365.20 2.1 646.39 2.5 -43.5
Other products made
from imported materials
on consignment basis 309.19 1.8 340.81 1.3 -9.3
Ignition wiring/other
wiring for vehicles 266.22 1.5 467.20 1.8 -43.0
Coconut oil 201.24 1.2 618.53 2.4 -67.5
Bananas (fresh) 198.17 1.2 211.43 0.8 -31.2
Metal components 195.35 1.1 283.95 1.1 12.7
Tuna 174.61 1.0 154.95 0.6 -27.0
Source: National Statistics Office
4-1
The Furniture industry is actually a sector of the home furnishings industry, which
also includes the housewares sector. Furniture product lines include those made of
bamboo, wood, rattan, plastic, buri, metal, stone, and other materials. Housewares, on
the other hand, include basketwork/wickerwork, shellcraft, ceramics/stoneware,
articles of textile materials, artificial flowers and trees, metalware, articles made of
glass (decorative/handblown and glassware), handmade paper, rugs and carpets, lamp
bases and shades.
The home furnishings sector is one of the selected revenue streams in the country.
Table 4.1 RP Export Performance: Furniture (In million U$)
Year Amount
2000 381
2001 297
2002 316
2003 278
2004 294
2005 303
Source: Office of the Regional Director-Region 2
Bamboo-based furnishings
Bamboo, like coconut (dubbed the “tree of life”), has many uses. It is an excellent
building and fencing material as well as material for furniture, house décor, mats,
baskets, toys, you name it; many other uses will be discovered as attention and
resources shift to bamboo as an alternative to wood. A couple or more years back,
Newsweek magazine carried an article on bamboo as an excellent material for bicycle
frames, in large part because of its lightness, flexibility, and strength, and of course its
abundance. A bicycle partially made of bamboo was actually on display at the Vigan
festival last January 2010.
The bamboo is relatively easy to propagate – it thrives almost anywhere, even in
swampy and arid areas and other God-forsaken places where other trees and plants
refuse to grow. Bamboo propagation is usually done through cuttings, not seeds, as
bamboos are known to flower only once in 50 years.1 And, unlike most wood species,
bamboo which belongs to the grass family, grows and multiplies very fast, attaining
mature and harvestable status in 3-4 years, even less for some bamboo species. By
comparison, Philippine mahogany, a relatively fast-growing tree, becomes harvestable
only after at least 15 years.
Mention has been made of bamboo as if it were of one kind. There are actually
hundreds of bamboo species all over the world. Of these, 62 species are known to
grow in the country although only 21 species are endemic to the Philippines. Bamboo
stands in the Philippines occupied 39,200-52,700 hectares in 1997 distributed as
follows: 20,500-34,000 hectares (58 percent) in forest lands, 3,037 hectares (7
percent) in private plantations, 2,236 hectares (5 percent) in government plantations,
and 13,434 hectares (30 percent) in natural stands in private lands. [1]
1
There is the famous example given by Albert Hirschman, in Development Projects Observed, ca. 1970, of a pulp
and paper mill project in South Asia that had to be discontinued because the bamboos which were supposed to be
the raw material for the mill suddenly - and unexpectedly - flowered, and then just as suddenly died.
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The number of poles harvested in 2007 was 1,528,000 which registered a 56.1 percent
increase from the 979,000 pieces harvested in 2006, although still a far cry compared
to 2,337,000 harvested in 2000. [2] Of the many uses of bamboo, furniture and
handicrafts are the most important, accounting for 40 percent of the total raw
production. Fish pens, housing, and construction use up 25 percent of this volume,
while the vegetable and fruit industries use up around 10 percent for crates, pallets,
and similar packing items.
The domestic market absorbs most of the output of the bamboo industry. But a
modest proportion of the total is exported to other countries, mostly to the US. Total
exports of Philippine bamboo in 2007 was 47,005 (net kilograms) valued at US$25,
231. Meanwhile, total exports of bamboo seats was 87,592 (gross kilograms) valued
at US$ 247,618. The destination, volume, and value of bamboo seat exports are
shown in Table 4.3. In the same period, exports of bamboo bedroom, dining room, or
living room sets had a total of 59, 898 gross kilograms with a value of US$ 1,676,152.
The destination, volume and value of these types of bamboo furniture exports are
shown in Table 4.4. [2]
Table 4.3 Forest-based Furniture Exports, 2007 (Quantity in kilograms, value in US$ FOB)
Country of Destination Quantity Value
Seats of bamboo
Australia 6,606 10,256
Bahamas 120 307
Belgium 707 1,160
Canada 560 4,633
France 8,105 14,612
Germany 3,280 6,490
Guam 80 65
Hawaii 312 2,576
Italy 6,886 23,760
Japan 2,619 16,547
Mexico 123 304
Puerto Rico 100 1,432
Qatar 2,191 8,764
Singapore 3,886 4,772
United Kingdom 2,093 4,850
United Arab Emirates 2,500 6,782
USA 47.424 140,308
Total 87,592 247,618
Source: National Statistics Office
Table 4.4 Forest-based Furniture Exports, 2007 (Quantity in kilograms, value in US$ FOB)
Country of Destination Quantity Value
Bedroom, dining room or living room sets of bamboo
American Samoa 400 1,085
Australia 7,442 20,588
Belgium 15,584 43,584
Brazil 3,510 12,299
Brunei Darussalam 400 1,444
Bulgaria 4,282 8,982
Canada 1,554 6,550
China, People’s Republic 2,967 9,006
China, Republic of (Taiwan) 100 300
Costa Rica 1,912 4,537
Cyprus 1,200 2,494
4-3
Country of Destination Quantity Value
Dominican Republic 6,500 23,232
France 26,203 39,965
Germany 20,221 52,686
Guam 40 119
Hawaii 15,461 61,923
Hong Kong 13,200 21,000
India 127 1,011
Italy 109,044 385,466
Japan 20,001 52,240
Korea 1,750 3,200
Malaysia 825 11,857
Mexico 4,957 14,647
Moldova 300 730
Netherlands 5,010 2,433
New Zealand 100 192
Norway 2,500 520
Puerto Rico 5,500 7,800
Saudi Arabia 8,878 11,909
Singapore 11,512 25,140
South Africa 171 925
Spain 7,560 16,835
Thailand 133 440
Turkey 1,550 5,361
United Kingdom 14,531 35,584
USA 203,973 784,719
Vietnam 500 5,349
Total 519,898 1,676,152
Source: National Statistics Office
By far the biggest export items from bamboo were gifts, toys and housewares (GTH),
with a total value of FOB $448.8 million. Other bamboo products which have been
exported are bamboo poles (allowed only for bamboo torches, electric lamps, ceiling
and wall light fittings, and bamboo seats). Philippine bamboo products are exported to
more than 50 countries, with the US market absorbing approximately one-third of the
total.
The bamboo sector is composed of input suppliers, growers, local traders, furniture
makers, wholesalers, parts manufacturers/fabricators, and exporters. There are
registered bamboo enterprises throughout the Philippines, with the bigger ones
concentrated in the large urban areas of Metro Manila, Pangasinan, Cebu, Iloilo, and
Bacolod. There are also many small unregistered firms and informal market
transactions. Many of the firms also carry non-bamboo materials and products, for
which they may be listed among the non-bamboo firms.
Wood furnishings
There are several common service facilities available for the home furnishings
(bamboo and woodwork) industry in the Philippines.
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Table 4.5 Common Service Facilities for the Home Furnishings Industry, 2009
Type of Facility/Services
Facility Owner/Location Offered Equipment
San Vicente Furniture Makers Kiln drying of wood Kiln dryer
San Vicente, Ilocos Sur Woodworking Woodworking tools and
machinery
Metro Vigan Chamber of Woodworking Woodworking machinery
Commerce & Industry
Mira, Bantay, Ilocos Sur
Nagaparan Rattan Furniture Production and processing of Rattan splitting, shaving and
Makers Association bamboocraft & furnishings finishing tools
Danglas, Abra
Quirino Bamboocraft Makers Bamboocraft making Bamboocraft tools and
Association equipment
Quirino, Ilocos Sur
Cabugao Bamboocraft Makers Bamboocraft Bamboocraft tools and
Association equipment
Cabugao, Ilocos Sur
Camp One Kiln drying of wood 3,000 board feet kiln dryer
Rosario, La Union
LUFAWCA Relending use of woodworking Chainsaw, 2 units, planer and
Udiao, Rosario, La Union equipment drill plants
Pinilit Tribal Community Bamboocraft Production and Bamboocraft tools and
Ocampo, Camarines Sur Display Center, training on equipment; training venue
bamboocraft
Northwestern Cagayan Furniture Kiln drying 2,500 bd ft steam-heated
Producers Cooperative lumber kiln dryer
(1) Sta. Cruz, Ballesteros,
Cagayan
(2) D’Leano, Claveria, Cagayan
Association of Disabled Persons Kiln drying, production of semi- Drill press, saw, drum sander,
Production Center processed bamboo products assorted hand tools, kiln dryer
Tubugan, Iloilo
CSF for Bamboo Furniture Production of bamboo furniture Auger bit, c-clamp, hole saw,
Making steel square, turn buckle
Bgy. Ayaman Bamboo Furniture
Makers
Cabatuan, Iloilo
CSF for Furniture and Kiln drying and production of Kiln dryer, electric drill, hole
Furnishings Making bamboo furniture and saw, electric planer, circular
Damires Multipurpose Coop. furnishings saw, compressor, drill press,
New Lucena ARC, Iloilo City disc sander, drum sander,
treatment vat
CSF for Bamboocraft Bamboocraft production Cross cut saw, hacksaw turner,
Esparar Multipurpose Coop pull-push rule, blow torch 1 cap,
San Pedro, San Jose, Antique spokeshave (conc), spokeshave
(flat), claw hammer, long nose,
pliers, vice grip, adjustable
wrench, bar clamp,
multipurpose h. drill,
compressor, steel mould
(round), unit boiling tub,
bamboo shaver, electric grinder,
electric motor, wood lathe
machine, tri-square
Balilihan Basketweavers Bamboocraft production and Bamboo slicing machine,
Multipurpose Cooperative display center, bamboo basket bamboo spiltter, Makita drill
Balilihan, Bohol production
4-5
Type of Facility/Services
Facility Owner/Location Offered Equipment
San Agustin, Romblon Inter-
Workers cooperative
Dońa Juana, San Agustin, Wood drying and storage Kiln dryer, storage and shed
Romblon facility, table saw, miter saw,
rod maker, sander
Antequera Producers Coop. Basket production Hand tools, dyeing & bleaching
Poblacion, Antequera, Bohol equipment
Toledo Unified Livelihood Buffing services Buffing machine, 2 units, with
Enhancement Development electric motor, 4 units
Organization
Magdugo, Toledo City, Cebu
Wood furniture processing Production of wood furniture Electric laner, 1 unit
facility
Bolos, Siquijor
Kiblawan Livelihood Rattan processing Rattanncraft tools & equipment
Foundation
Kiblawan, Davao del Sur
Association of Tribal Council Rattan processing Rattan processing equipment
Poblacion Santiago, Agusan del
Norte
Cottage Industry Technology Facilities for: bamboo furniture Bamboo multi-blade slicing
Center & novelty items making, machine air compressors,
SSS Village, Marikina City engineered bamboo product automatic bamboo splitting
Metro Manila making, materials manipulation machine, automatic rattan rod
& product application activities, shaving machine, bamboo long
product prototyping, finishing higo making machine, bamboo
adjustable twin rip, circular cut
sawing machine, bamboo
inside-knot removing, shaving,
and width-sizing machine
4.1.1.2 The Woodworks/Home Furnishings Industry in Region 2
Region 2 still has many bamboo stands, although perhaps not as plentiful as in earlier
decades. Some of these bamboo stands are in private plots, mostly in backyards, while
others are in public lands, especially along bodies of water; very few are as yet in
commercial farms or plantations.
In Region 2 bamboo is available in the following areas: in Cagayan: Solana, Enrile,
and in Isabela: Delfin Albano, San Pablo, and Sto. Tomas. The total area with bamboo
in the region is unfortunately understated as there are no statistics on bamboo supply
in Quirino and Nueva Vizacaya, where there must also be some bamboo stands (Table
4.6). And even the available statistics may not be up to date. The DTI provincial
director in Cagayan admitted in an interview that a survey still has to be conducted to
determine the current supply situation on bamboo in Cagayan.
Home furnishings include trays, vases, fancy boxes, lampshades and other lighting
fixtures, wall décor, decorative baskets, mirror frames, mats, and accent pieces of
furniture. The DTI identified home furnishings as the OTOP in Baggao, Cagayan. The
Baggao furniture producers boast of their innate craftsmanship. The assistance
provided by DTI and the LGU transformed their wood furniture industry. This model
OTOP employs 102 workers and generates an average of P4.8 million in sales.
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Table 4.6 Area planted to bamboo, Region 2 (In hectares)
Location Area
Cagayan
Solana 100.0
Enrile 10.0
Tuao 5.0
Isabela
Delfin Albano 14.5
San Pablo 30.0
Sto. Tomas 5.0
Quirino No data available
Nueva Vizcaya No data available
Like the other identified OTOPs in the rest of the country, this OTOP continues to
benefit from business counseling, skills and entrepreneurial training, product design
and development, introduction of appropriate technologies, and marketing assistance
from LGUs and the private sector.
Four bamboo species are relatively abundant and widely utilized in Region 2; these
are, to go by their Tagalog names: kauayan tinik, kawayan kiling, bayog, and buho.
Each species has its unique characteristics, its strengths, and its peculiar uses.
The kauayan tinik has a relatively large circumference, is straight, and is therefore
good material for house floors, walls, and table tops. The bayog is not as straight as
the kauayan tinik but is more solid and therefore is good material for house and fence
posts and makes for good frames where natural curves are needed for aesthetic
purposes. Through casting during the growth period, the bayog can, in fact, be made
to follow certain desired curves. The buho is straight but hollow; it is a good case or
receptacle (an Ilocano delicacy known as tinubong makes use of buho as container)
and is good material for walls, insulation (ceilings) and the like. The kiling is a cross
between the tinik and the buho, so it can serve as substitute for both.
Significance of the woodworks/home furnishings industry
The home furnishings (wood and bamboo) industry provides jobs and, consequently,
leads to the improvement of the quality of life of the people in the region. The
industry generates users of non-timber wood species like gmelina and bamboo as
alternative raw material to hardwood for producing various products including home
furnishings.
Despite the economic contribution of bamboo-based home furnishings, the potential
of the bamboo is not being maximized. The region lacks bamboo seedlings.
Information dissemination on the economic significance of bamboo production is
inadequate.
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4.1.2 Value chain and sub-sectors
4.1.2.1 General value chain of the woodworks/home furnishings)
industry in the Philippines
As the materials move along from the source to manufacturer, to the end-user, prices
generally increase due to value addition coming from services performed and profits
associated with the services and margins of the intermediaries.
In the case of the bamboo, it can go directly to the user (if the farmer sells the pole to
a neighbor who uses it to build a house) or it can pass through a number of hands
where it can be transformed into a piece of furniture or handicraft by the manufacturer,
and then finally transported via a trader to the end-user either in the domestic or
foreign market. Generally, the longer the channels, the higher the cost incurred due to
the participation of more intermediaries and the physical distance between the source
and final destination.
Figure 4.1 shows the general value chain of the home furnishings (bamboo and
woodworks) industry. It includes several players: (1) farm input suppliers for bamboo
and tree farms; (2) nursery owners of bamboo and tree farms; (3) plantation owners;
(4) cutting group leaders and gatherers of bamboo; (5) primary processors of bamboo
and lumberyards; (6) lumber/non-timber traders; (7) home furnishings manufacturers;
(8) and local and export traders, and end-users.
As can easily be seen in Figure 4.2, the bamboo furniture industry value chain is more
or less similar to that of the wood furniture industry (see Region 1: Furniture Industry
Cluster). However, since the bamboo industry is relatively less established, its value
chain is probably less complex (i.e. there are less layers and stakeholders), on good
reason being that the raw material used is sourced nearer the place of manufacture,
while for wood the source can be very far, sometimes even other countries.
4.1.2.2 Value chain of the woodworks/home furnishings
industry in Region 2
The value chain of the home furnishings (bamboo and woodwork) industry in Region
2 varies from the general value chain of the industry in three respects: (1) the manner
by which home furnishings producers procure their bamboo; (2) the absence of
primary processors of bamboo; and (3) presence of cooperatives and associations that
market the products of members. The producers get the ‘unprocessed/fresh’ bamboo
directly from the cutting group leaders and gatherers. They do primary processing
where the bamboo is scraped, cleaned, dried, and treated before coming out with
semi-processed materials such as bamboo splits, sawali sheets and boards, among
others. This situation requires individual producers to invest in appropriate equipment
and facilities (e.g. forming/bending, drying, and treatment facilities, etc.) for the
material preparation (primary processing), in addition to the equipment and facilities
necessary for coming out with the finished product (finishing, assembly, etc.).
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Figure 4.1 Value Chain of the Wooden Home Furnishings Industry, General
`
4.1.2.3 Support industries
Nurseries
The establishment of bamboo nurseries is not that popular in the region. There are
limited nurseries of gmelina.
Plantations
The region is famous for the abundance of hardwood, particularly of the narra and
mahogany varieties, that are very suitable for producing furniture.
Wood processors and lumberyards
The wood processors and lumberyards are the direct market of the wood plantations.
They are the main providers of support to the home furnishings industry. This is
where the woodworks sub-sector processors of the home furnishings industry get their
wood requirements. For the bamboo pole, since the producers get their bamboo
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requirements directly from the gatherers and cutters, there is no backward industry
link. Forward linkage is provided by the machinery and parts fabricators and suppliers
of chemicals and finishing materials.
Figure 4.2 Value Chain of the Bamboo Home Furnishings Industry, Region 2
4.1.2.4 Support agencies
Technical and financial support for the home furnishings industry is provided by
government agencies like the DENR, DA, DTI, and DOST, PCARRD, and by the
LGUs, while research support is provided by local state universities (Cagayan State
University in Piat, Cagayan, Isabela State University in Echague, Isabela, Nueva
Vizcaya State University in Bayombong, Nueva Vizcaya, and CBRC in Quirino.
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Department of Trade and Industry-Region 2
DTI presence is felt strongly in the region, particularly in Isabela province where the
home furnishings producers look to the agency as their number one supporter.
Table 4.7 DTI-assisted programs in Region 2
Nature of Title Collaborating
assistance agencies
Skills training Raw material manipulation; weaving and finishing LGU, TESDA,
techniques, upgrading of bamboo novelty items; PHILEXPORT,
advance machine operation, composing and CITC, PDDCP
lamination; furniture making; Christmas décor making;
furniture design
Management Managers course; entrepreneurship; how to participate Land Bank
training in trade fairs; OTOP program;export marketing;
industrialization of bamboo
LGUs
There are some LGUs that are very aggressive in promoting the development of the
home furnishings industry in the region.
Table 4.8 LGU-assisted programs in Region 2
LGU Assistance program
Tuguegarao City government Organization of trade fairs
Isabela provincial government Reforestation, OTOP orientation seminars,
establishment of a bamboo regional center
(planned),
Tumauin, Isabela local government Skills training, reforestation
Delfin Albano, Isabela Seedling production, establishment of nursery
with different bamboo species in every barangay,
oven, all the DTI programs given in Table 4.5
The Delfin Albano LGU is planning to come out with an ordinance that will ban the
indiscriminate cutting of bamboo.
4.1.3 Demand/users and markets
4.1.3.1 Major users
Most of the customers of the home furnishings producers in Region 2 come from the
region; a small number have customers in Metro Manila. Most of the customers are
households and institutions like hotels and schools. There are also industrial users.
Producers generate sales through walk-ins, friends, relatives, and referrals. They also
join trade fairs in the region and in Metro Manila.
4.1.3.2 Domestic market
There are no available figures on the local demand for home furnishings.
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4.1.3.3 Export market
There are no direct exporters from among the respondents interviewed in the survey;
although some members of a cooperative are indirect exporters.
4.1.4 Raw materials supply
There is no question as to the supply of planting materials for wood and bamboo.
There are available propagules and seedlings for growers. The latter buy the planting
materials directly from sources. In the past, a bamboo grower even gave away her
seedlings for free. The processors/manufacturers purchase the wood and bamboo
poles individually. Some cooperatives and individual processors participate in the
bidding of confiscated logs. In most cases the materials are delivered to the individual
producers of home furnishings; but there are also instances when the producers pick
them up.
They pay in cash; credit terms are also common among long-time business partners.
Price and quality considerations largely determine the choice of raw materials among
producers of home furnishings. Another major factor among traders is raw material
availability.
Table 4.9 Sources of raw materials
Raw material Source
Bamboo culms Cagayan
Gmelina Isabela, within the region
Lumber Isabela
Tangile Within the region
Mayapis Within the region
Plywood (hardwood) Within the region
Bamboo Isabela, within the region, Luzon
Rattan, natural and synthetic Within the region
Narra Within the region, Luzon
4.1.5 Productivity
The producers look up to the producers in Iloilo and Pampanga. They admit that their
productivity is lower than their counterparts in the two provinces.
4.1.6 Price competitiveness
In general, the producers do not have a standard price for their products. Members of
associations and cooperatives set the same prices for their products. Many producers
sell their products at a price lower than the rest. But there are also some who price
their products higher because of the perception that they produce better quality
products, which is supported by their investment in technology.
4.2 Potentials and Issues in View of Cluster Development
4.2.1 General Issues
The prospects for industry clustering in the bamboo- and wood-based home
furnishings industry are intimately tied up with the development of the bamboo and
wood industries: if these industries expand, clustering and cluster initiatives will make
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headway, but if the industries contract or are headed towards bad times, clustering and
cluster initiatives will not prosper.
The bamboo furniture industry is not yet poised for rapid and sustained development.
At present, there is still no real appreciation of the economic significance of the
bamboo. First there is still the issue of its social acceptance. Being primarily a
hardwood-producing region, the bamboo does not enjoy the same stature of
importance as that of the wood. Bamboo production is still predominantly backyard.
There are large tracts of vacant areas suitable for bamboo production.
A story worth mentioning at this point is that of Felina Castillejos. Ms. Castillejos
hails from Bgy. Bagu, Abulug, Cagayan. She started growing bamboo seedlings in
1993. Her seedlings are the kauayan kiling and machico varieties. Machico is similar
to the buho variety but it is thicker, bigger, and sturdier. She uses ½ - 2 year old culms
as propagules. Nobody wants to buy her seedlings; she gave them away while she
burned the others. In 1996, the government bought 1,000 seedlings from her farm. It
was only this year when her business started to pick up. She met a manufacturer of
chopsticks and toothpicks after attending a seminar organized by DTI-2. The
manufacturer ordered 200 seedlings of kauayang tinik and machico which the client
will pick up in May 2010. Each seedling costs P200.
The region is awash with raw materials. The supply of wood in region is not only
sufficient for the requirements of the local furniture makers. There is some surplus
which can be sold to other regions. Some Vigan furniture makers claim to source their
wood raw material (narra, mahogany) from Cagayan and Isabela. On top of this, the
use of gmelina is slowly gaining ground among producers of furniture and home
furnishings in the region. This is in response to the government’s call for the use of
alternative materials for furniture as a means of preserving our diminishing forest
reserves. Some enterprising landowners have already established industrial tree
plantations. The more common species that they grow is the gmelina.
Concepcion B. Balucas is the bookkeeper of the Isabela Sierra Madre Greeners
Association. The association has 72 members. It supplies gmelina to furniture makers
in the region. In 2009, the association sold 1,000 board feet a month at P15 per board
foot. Total annual sales of the association for the year 2009 was P180,000.
Despite being members of the association, each member can sell individually to
producers of furniture and furnishings. Majority of the members cannot access formal
financing sources to support /sustain their business. They are regular customers of
informal lenders, particularly Indian nationals.
4.2.1.1 Competitive advantage
The abundance of quality wood puts the region in a very high competitive position,
offsetting the negative point of the limited availability of bamboo. The existence of
vast tracts of idle lands that can be used to grow bamboo or expand tree plantations
contributes to the advantage of raw material availability. Complementing the easy
availability of raw materials is the presence of skilled and experienced workers that
can be tapped by the industry. This was made possible by the conduct of various skills
training programs in the region.
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Some producers, however, claim that some programs are “just a waste of time.”
4.2.2 Technology
There are some producers who produce by job order. Most of them produce for stock
as well as by job contract. Majority of the producers (individuals and
cooperatives/associations) use manual methods. The most common machine they
have is the splitting machine and the dryer.
However, the technology for the mass manufacture of bamboo products is not yet
available in Region 2. Moreover, experience with previous efforts by TESDA Region
2 to train skilled bamboo and wood workers has not been very encouraging, to put it
mildly. According to an official of TESDA, the agency once tried to offer training
programs/courses on bamboo craft using state-of-the art equipment. But despite the
fact that the program was offered free or at a minimal cost, there were no enrollees,
and so the program had to be discontinued, and now the equipments lie idle in Aparri
in Cagayan.
4.2.3 Marketing and distribution
All the producers market and distribute their products individually. The cooperatives
and associations help market the products of the members. The customers are mostly
walk-ins (clients of the bamboo grower go to the farm), friends, relatives and their
referrals. Many of the producers get acquainted with new customers through their
participation in trade fairs, bazaars, and the OTOP trade center in Tuguegarao City,
Cagayan. A few have family members in Metro Manila who serve as their agents. A
cooperative provides transportation facilities and the necessary documents (DENR
permits, official receipts, etc.) to the members who participate in trade fairs and
similar marketing activities outside the town.
The raised some marketing concerns. They have issues with the checkpoints that
serve as fronts for harassment, and government policies, particularly those that
emanate from the DENR.
4.2.4 Financing facilities
Table 4.10 Financing facilities availed of by Region 2 producers of furnishings
Facility Provider/amount
Working capital LGU (municipal government); LBP
SBGFC /P270,000
DOLE/P75,000
Fixed asset acquisition DTI;
- Same – DTI/P16,000
- Same - Coop member’s equity
Delivery van SBGFC/70% of acquisition cost of P430,000
Tools acquisition FPRDI/P500,000; DOST/P680,000
Expansion LGU (municipality)
Trade show participation LGU (municipality
Others : rediscounting facility Private lenders
loan Informal lenders (Indian national)
LGU (municipal government)
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The producers attribute the lack of real estate property for collateral as the reason for
difficulty of getting a loan from formal lending institutions. The most common
requirement they need is working capital to sustain the business.
4.2.5 Skilled labor development
Appropriate labor supply for the home furnishings industry is generally available and
adequate in the region. Workers can be trained easily and several training programs
can be made available locally. The processes that require skilled workers are in: those
involving machine operations, including the chainsaw, carpentry, carving, assembly,
weaving, and finishing. Some producers need semi-skilled workers only; they can
train their own workers. The bamboo grower uses purely manual methods and needs
only a helper in the farm.
The producers lament the bad attitude among workers and their lack of quality
consciousness. They attribute the latter to the system of compensation, ‘pakyaw’,
where a worker is paid per output. Despite the skills training programs that have been
conducted, the producers claim there is insufficient skilled labor that can meet quality
output. Many mention the high cost of labor that can amount anywhere from
P300,000 to P400,000 a month. The workers work only for three to four hours a day
in the factory so they prefer to work in the farm. The producers cannot afford to
match the income that a worker can get from farming tobacco, rice, and corn.
Rogelio Dimaandal owns a construction and wood furniture business. He is one of the
three major construction contractors for Mormon churches nationwide. He generates
an average annual sales of P8.0 to P10 million. He gets his major materials consisting
of tangile, mayapis, gmelina, and plywood from the region. His operations is 80
percent mechanized; he has drying, treatment, and finishing facilities. Even with the
experience, facilities, abundance of raw materials, and proliferation of skills training
programs in the region, Rogelio Dimaandal admits that Pampanga has the upper hand
when it comes to quality furniture. He attributes this to the good attitude of the
workers in Pampanga.
4.2.6 Infrastructure
Infrastructure facilities are generally adequate in the region. Some producers are
concerned about the insufficiency of transportation facilities. High transport cost can
be a major problem for makers of furniture and furnishings in the region. This is one
which can make them uncompetitive with furniture makers from Pampanga or even
Region 1, not to mention the CALABARZON (Region 4) which is just outside Metro
Manila.
Another concern is the absence/lack of warehousing facilities. Being individual
producers, and not to forget the attendant costs involved, they do not find it practical
to put up their own warehouse
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4.3 Cluster Structure
4.3.1 Existing industry cluster initiatives
There is no cluster for the home furnishings industry in Region 2. There are
associations and cooperatives but not all producers are members of these groups. The
idea of what a cluster is and its advantages is alien to them. However, after getting a
brief overview of the cluster concept, many producers expressed openness to the idea
of establishing a cluster. They foresee the existence of a cluster as something that
could improve their production operations and facilitate access to financing.
4.3.2 Relevant industry/trade associations
There are several industry/trade associations supporting the woodworks/home
furnishings industry of Region 2. Prominent among these are the following:
Isabela Wood Chamber Association, composed of 150 producers and 20 carvers
and weavers.
Persons with Disabilities, consisting of 27 differently-abled wood- and
bamboocraft processors.
Golden Ace Multi-purpose Cooperative, with 55 member-enterprises, involving
440 persons. The cooperative provides transportation facilities and the necessary
documents to members who participate in trade fairs or who deliver their finished
products to buyers outside the town.
PhilExport-Region 2 Chapter, whose support fund has provided one association
with a splinter machine, laminating machine, and a bar clamp.
Association Bayabo Young Entrepreneurs (ABAYEN), a group made up of 10
young processors. They are the beneficiaries of the machines and equipment
provided by the PHILEXPORT support fund.
Isabela Furniture Producers Industry Association
Isabela Sierra Madre Greeners Association, an association of gmelina growers.
Some members are primary processors of gmelina. This association is composed
of 72 growers and more than 150 processors.
4.3.3 Support from research institutions
The Isabela State University, Nueva Vizvaya State University, and CBRC in Quirino
conduct researches on the development of bamboo propagules.
4.4 Development Policies and Activities
4.4.1 Expectations for cluster development, existing support programs,
and aggressiveness towards cluster approach
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4.4.1.1 Lead government agencies
DTI-02’s initiatives towards the development of the home furnishings industry fall
under their mandate of promoting rural enterprise development (RED). The different
associations and groups look up to DTI-02 as very aggressive in promoting
entrepreneurship and small enterprise development in the region.
4.4.1.2 Local government units
Some local government units are very aggressive in supporting the rural industries in
their area of governance. They co-sponsor training programs and seminars and
provide loans to producers.
4.4.1.3 Industry associations
Industry associations and similar groups are as aggressive as the DTI in supporting
the endeavors of the members. They are considered partners of DTI insofar as
developing the home furnishings industry in the region is concerned.
It is noteworthy to mention that some individual producers who are not members of
any association or group volunteer to share their talent and resources to other
producers, particularly in training workers.
4.4.1.4 Regional Development Council
The producers are not aware of the existence of the RDC, its role and functions
relevant to the industry.
Interviewees
1. Rogelio M. Dimaandal, president, R.M. Dimaandal Construction & Woodcraft,
Caritan Norte, Boundary Atulayem, Tuguegarao City, 11 February 2010
2. Araceli Beronilla, manager, Philip Son Wood Craft, Maligaya, Tumauini, Isabela,
10 February 2010
3. Victor Emmanuel G. Calemgan, owner, Countryfarm Woodcrafts, San Jose,
Quirino, Isabela, 10 February 2010
4. Isabel N. Talamayan, chairman, Golden Ace Multi-purpose Cooperative,
Alinguigan, Ilagan, Isabela, 10 February 2010
5. Ma. Victoria A. Madawin, wood processor, Ilagan, Isabela, 10 February 2010
6. Concepcion B. Balucas, bookkeeper, Isabela Sierra Madre Greeners Association,
Maligaya, Tumauin, Isabela, 10 February 2010
7. Felina G. Castillejos, bamboo grower, Bagu, Abulug, Cagayan, 10 February 2010
8. Elvin Uban, bamboo furniture maker, Delfin Albano, Isabela, 12 February 2010
9. Ruben M. Dumlao, secretary, sangguniang bayan of Isabela and OTOP point
person, Delfin Albano, Isabela, 12 February 2010
10. Luisito V. Basa, president, ABAYEN, Delfin Albano, Isabela, 12 February 2010
11. R.M. Perez, Isabela State University, Echague, Isabela, 12 February 2010
12. Leovilda J. Tumalilan, chief, Business Development Division, DTI-02,
Tuguegarao City, Cagayan, 12 February 2010
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References
1. Industry Development Section, Office of the Regional Director – Region 2, “The
Philippine Bamboo Industry and its Prospects in Region 02”
2. 2007 Philippine Forestry Statistics
3. DTI. BMSMED. Directory of common service facilities for micro, small, and
medium enterprises (MSMEs) 2009 edition
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