Export competitiveness of Philippine seaweeds before and during the implementation of Agriculture and Fisheries Modernization Act (AFMA) 1992-2006

This study determined the export competitiveness of Philippine seaweeds before and during the implementation of AFMA [Agriculture and Fisheries Modernization Act]. The study used regression analysis to determine the effects of AFMA and other variables on the volume of exports of seaweeds. To measure the competitive advantage of Philippine seaweeds, the study used the revealed comparative advantage and cost competitiveness analysis. Domestic production of seaweeds increased from 1992 to 2006. The volume of exports of seaweeds and other algae used for food posted an increasing trend due to increasing imports of China. The volume of exports of seaweeds/other algae were positively related with AFMA and foreign exchange rate. Foreign exchange rate was positively related to the volume of exports of seaweeds and other algae used for food at ten percent while volume of exports of Indonesia was negatively related. For the periods considered, RCA [revealed comparative advantages] values of Philippine seaweeds were all greater than one, signifying that it was still highly competitive in the global market. However, it posted a declining trend. The RCA value of Philippine seaweeds was significantly much higher at one percent probability level compared to the RCA value of Indonesian seaweeds. Although, the level of export competitiveness of Philippine seaweeds were higher than Indonesian seaseeds, its increasing level of export competitiveness poses a threat to the export of Philippine seaweed. Philippine seaweeds have competitive advantage in production and trading based on the RCR [resource cost ratio] values greater than one for both periods. The problems faced by the seaweed industry were increasing competition with other countries, continued smuggling of seedlings for planting and raw seaweeds for processing in the Asian neighbors, higher prices of raw dried seaweeds, shortage of supply as raw materials for local processors and deteriorating quality of local seaweeds. In order to enhance the export competitiveness of seaweeds industry, the following recommendations are suggested: (1) increase government support to enhance productivity of quality seaweeds, (2) reduction of smuggling of seaweeds through strict enforcement of the law, (3) increase the budget allocation for the five AFMA components to enhance the competitiveness of the Philippine seaweeds, and (4) strengthen small seaweed farmers/industry associations in the country.