Philippines Sourcing: Gifts & premiums 2018

 

In Philippines Sourcing: Gifts & premiums 2018, buyers can find:

Verified exporters– 14 featured suppliers of various gifts and premiums

Products– Full color images with specifications & prices

Supply market intelligence– Supply centers, industry trends, challenges, production and pricing

Export data– Philippines-wide details and survey results from featured exporters

To read the full report, click on the section tabs below.

Sector highlightsSuppliers & productsIndustry overviewProduct featuresSupplier surveyPDF downloadSupplier list

Philippines Sourcing: Gifts & premiums 2018 Sector highlights

Industry overview

Product featuresSupplier survey
  • The implementation of the TRAIN law in 2018 presents both opportunities and challenges for the industry.

  • Exports of products associated with gifts and premiums sector during the first five months of 2018 exceeded $33.1 million.

  • Most gifts and premiums suppliers are MSMEs.
  • Abaca is a common material across different product categories.

  • Several suppliers are offering items with elements that are culturally significant to differentiate their products.

  • Product specifications are typically checked against buyers' requirements through manual handling and visual inspection.
  • More than 50 percent of the companies surveyed see quotes remaining at current levels inthe next six months.

  • Adoption of environment-friendly materials will be a strong trend in upcoming releases.

  • Mixed-media designs will continue to grow in number.

Philippines Sourcing: Gifts & premiums 2018 Suppliers & products

Philippines Sourcing: Gifts & Premiums 2018

Philippines Sourcing: Gifts & premiums 2018

• Gifts & novelties • Stationery • Gift packaging

Our team has visited all Philippine manufacturers featured here to verify their export capability. Each has a website on GlobalSources.com with full company detailsproduct images with specifications, manufacturing capability and complete contact details.

Click suppliers’ names below to view their full profiles and product offerings on GlobalSources.com.

Sections


Products

Below is a selection of products from our featured suppliers. Click on the images to find more products and supplier information.

For a complete listing of the featured suppliers, click here.

Gifts & novelties   
Stationery   
Gift packaging   

Philippines Sourcing: Gifts & premiums 2018 Industry overview

Philippines Sourcing: Gifts & premiums 2018

Philippines Sourcing: Gifts & premiums 2018

• Gifts & novelties • Stationery • Gift packaging

This section discusses key issues affecting export manufacturers in the Philippines, offering insight into industry composition and important supply centers.

Philippine exportsCompetitive advantagesChallengesIndustry composition
  • Exports of products associated with gifts and premiums sector during the first five months of 2018 exceeded $33.1 million.

  • The US accounted for 45 percent of the export value.

  • Basketwork, wickerwork and other articles made of plaited materials are the top source of export revenue.
  • The artistry and creativity of Filipinos, reflected in their unique designs, is a key factor distinguishing Philippine products.

  • Makers also take advantage of the wide range of raw materials available in the country to differentiate their products.

  • The Philippines has a large pool of well-educated and skillful workers.
  • Rising production costs is a concern amid stiff competition in the global market.

  • Heavy reliance on manual processes are more prone to error.

  • Limited knowledge of the international market hampers product development.
  • MSMEs account for the majority of suppliers in the Philippine gifts and premiums industry.

  • Microenterprises have assets not exceeding $57,000.

  • Membership in organizations associated with the industry indicates there are over 200 companies in the organized sector.

Most suppliers consider the Republic Act RA 10963 or Tax Reform for Acceleration and Inclusion (TRAIN) Act to be the most important development affecting the industry this year. Implemented Jan. 1, 2018, TRAIN is the first package of the first package of the Comprehensive Tax Reform Program (CTRP). It reduced personal income tax rates and increased excise taxes for petroleum products and automobiles, among other provisions. For more information, visit: http://www.dof.gov.ph/taxreform/.

Suppliers interviewed in this report have varying comments about the law’s effects.

One important change resulting from the law is that it raised the value-added tax (VAT) threshold to PHP3 million from PHP1.9 million. Under TRAIN, self-employed individuals and professionals (SEPs) with gross sales and income receipts not exceeding the PHP3 million threshold now have the option to pay a flat rate of 8 percent on gross sales or receipts and other non-operating income in excess of PHP250,000, in lieu of the graduated income tax rates under the TRAIN law. This provision covers non-VAT single proprietors, professionals and mixed-income earners.

Suppliers interviewed noted that most of their employees viewed the revised tax system as beneficial because it exempted minimum-wage earners from paying tax. The holiday pay, overtime pay, night shift differential pay and hazard pay of such earners are also exempt from withholding tax. This perceived benefit gave their employees a sense of security and lessened requests for wage increases.

On the other hand, many people are reportedly expecting TRAIN to be a factor in pushing up logistics expenses and basic commodity prices due to the higher tax rates to be levied on petroleum products such as gasoline and diesel fuel oil in three tranches beginning Jan. 1, 2018, to Jan. 1, 2020.

The second package (TRAIN 2), which has not yet been enacted into law, “seeks to lower corporate income tax rates and rationalize fiscal investment incentives,” The Philippine News Agency reported July 8, 2018.

Exports

The Philippines does not track gifts and premiums as a separate export category, but statistics for products associated with the sector indicate that the industry’s exports from January to May 2018 dropped 30 percent compared with the same period in 2017. In the first five months of 2018, the Philippines sent abroad over $33.1 million worth of products.

The US and Japan were the top destinations, accounting for 45 and 32 percent of the value. The Netherlands, the UK and Germany were the other major markets.

In 2017, exports amounted to nearly $114.8 million, an increase of about 2 percent from 2016. The top importers were the US, Japan, Germany, the Netherlands and the UK.

Basketwork, wickerwork and other articles made of plaited materials rank as the no. 1 source of export revenue, accounting for 33 percent of the value of products shipped between January and May 2018. In 2017, the category contributed 32 percent.

The other main markets were the EU, Asia and the Middle East. Products sent to these destinations together accounted for 38 percent of the export value.

Competitive advantages

Suppliers and buyers alike point to the artistry and creativity of Filipinos as a key factor distinguishing Philippine products. This is reflected in their use of indigenous materials and elements to create unique and innovative designs.

Makers take advantage of the wide range of raw materials available in the country to regularly update their selections.

Abaca or Manila hemp, a staple in various product categories, grows on all three major islands of the Philippines. The country is the largest producer of the fiber, accounting for about 85 percent of global supply.

In the first quarter of 2018, the Philippines’ abaca production inched up about 2 percent year over year to reach 15,350 metric tons. The Bicol Region contributed 44.5 percent to the country’s total abaca production, according to the January-March 2018 Major Non-Food and Industrial Crops Quarterly Bulletin of the Philippine Statistics Authority. The other major sources were Eastern Visayas, the Davao Region and the Autonomous Region in Muslim Mindanao.

To boost output of the fiber, the government aims to expand abaca plantations to 238,666 hectares from the current 180,302 hectares, the BusinessMirror reported Feb. 27, 2018, citing the Philippine Abaca Roadmap 2018 to 2022.

Other locally sourced materials common in gifts and premiums are seagrass, rattan, bamboo, coconut shells, capiz shells and fibers from pineapple, banana, buri, raffia and tiger grass.

The country’s labor force is another advantage . The Philippines has a large pool of well-educated, skillful and trainable workers for weaving, painting, inlays and other complicated artistic work.

The Philippines had an estimated 70.9 million people aged 15 years old and above in January 2018, the Philippines Statistics Authority said in a news release dated June 14, 2018. Of this population, 44.1 million were reportedly in the labor force.

Challenges

Rising production costs is a concern amid the competition in the global market.

A kilogram of abaca fiber, for instance, ranges from PHP60 to PHP120, depending on the quality, The Philippine Star reported April 11, 2018. Rates in 2016 were from PHP55 to PHP75 per kilogram.

Besides the rising rates, handicraft suppliers are at a disadvantage compared with bulk traders when sourcing raw materials and bargaining for better rates because the former do not practice collective buying. To address raw material difficulties, suppliers have alternative sources of raw materials for backup. For abaca, most suppliers source from Mindanao, particularly in Bukidnon and Agusan del Sur.

The industry’s heavy reliance on manual processes is also another challenge. Gifts and premiums suppliers typically use manual processes in monitoring, receiving and managing raw materials and components inventory. Compared with computerized methods, the manual process takes longer, is prone to error and often results in wastage, which pushes up spending.

Additionally, the Philippines has relatively high labor costs compared with several of its neighbors in Asia. As of July 31, 2018, monthly minimum wage rates in the National Capital Region (NCR) range from PHP14,250 ($268.69) to PHP15,360 ($289.62), according to a comparative wages in selected countries posted on the website of the Philippine Department of Labor and Employment (DOLE).

To reduce costs, some suppliers have established their factories outside of the NCR. Rates in other regions of the Philippines are approximately 25 to 45 percent lower.

Lack of national branding and international certification is another factor hindering the industry’s growth. For one, many suppliers cannot take advantage of the opportunities presented by the EU’s Generalised Scheme of Preferences Plus program (EU-GSP+) because buyers want to source only from companies with certificates of standards compliance. Most companies do not have the financial capacity to upgrade their facilities and get certificates of compliance with the Business Social Compliance Initiative (BSCI); the Registration, Evaluation, Authorization and Restriction of Chemicals (REACH); and the Convention on International Trade in Endangered Species (CITES) of Wild Fauna and Flora.

Financial constraints is also make it difficult also another stumbling block to the industry with small and medium exporters tied in terms of financing and find it difficultfor manufacturers to cater accept tolarge-volume bulk orders because of financial.

The government, in cooperation with various business support organizations (BSOs), have implemented several initiatives to enhance the competitiveness of the gifts, decor and houseware (GDH) industry and MSMEs.

As part of efforts to differentiate the country’s products, Ma’i, the unified brand, was unveiled in October 2017. Ma’i was the name used to refer to the Philippines and its people by Chinese traders back in the 9th century, according to a report posted on the Board of Investments’ website on Jan. 18, 2018.

The government under the agencies of Department of Trade and Industry (DTI) and Department of Science and Technology (DOST) provides technical support on packaging and labeling, design and productivity enhancements. It also conducts capability training on sales and marketing to support the sector.

Industry composition

Suppliers of gifts and premiums from the Philippines are mostly micro, small or midsize enterprises that are family-owned or sole proprietorships.

According to the Philippine classification of MSMEs, microenterprises have up to nine employees and assets of up to PHP3 million or approximately $56,121. Small companies employ fewer than 100, and the assets of these businesses can reach PHP15 million or about $280,604. Midsize operations can have as many as 199 employees and assets of up to PHP100 million or roughly $1.9 million.

There is no official data showing the number of gifts and premiums suppliers in the Philippines, but membership in organizations associated with the industry indicates there are over 200 companies in the organized sector.

The Philippine Federation of Furnishings Associations (PhilFFA), which consists of eight organizations from the furniture, home decor, fashion and gifts sectors, reported having 558 members as of May 2017. Of the member organizations, the three directly associated with gifts and premiums companies—Association of Negros Producers (ANP), Cebu Gift, Toys and Housewares (Cebu-GTH) and Philippine Chamber of Handicraft Exporters & Artisans Inc. (PCHEAI)—had a total of 248 members.

Supplier locations map

The highlighted areas on the map show the locations of the head offices and factories of the gifts & premiums featured in this report.

Philippines Sourcing: Philippines Gifts & premiums 2018 Supplier Locations Map

Philippines Sourcing: Gifts & premiums 2018 Product features

Philippines Sourcing: Gifts & premiums Product features

Philippines Sourcing: Gifts & premiums 2018

• Gifts & novelties • Stationery • Gift packaging

This section offers information on how trends in materials, design and manufacturing are impacting prices offered by Philippine gifts & premiums suppliers.

Buyers can also learn more about the materials used and the common price ranges of certain designs.

Materials & designsManufacturing & QCPricing
  • Abaca is a common material across different product categories.

  • Combining different materials remains a popular way of creating varied looks and textures.

  • Several suppliers are offering items with elements that are culturally significant to differentiate their products.
  • Subcontracting is common.

  • Product specifications are typically checked against buyers' requirements through manual handling and visual inspection.

  • Manufacturing lead times range from 30 to 45 days for the MOQ.
  • Handcrafted models are typically priced based on the raw materials used and the complexity of the design.

  • The other top considerations are order volume and payment conditions.

  • Quotes have been on an upward trend due to rising production costs.

Materials & designs

Handcrafted gifts and premiums from the Philippines come in a wide range of materials. Makers usually adopt materials from trees, plants and other natural resources in the country, in large part because these immediately differentiate products as being made in the Philippines.

Abaca is a common material across different product categories. The Bicol Region in Luzon is the main source of the fiber. Eastern Visayas, Caraga, Davao Region and the Autonomous Region in Muslim Mindanao (ARMM) are the other typical sources.

Rattan is another widely adopted material, particularly in handcrafted bags, figurines and storage solutions. Among the major producers of unsplit rattan are Quezon, Cagayan and Palawan provinces in Luzon, and Agusan del Sur and Davao Oriental in Mindanao, according to 2016 statistics posted on the website of the Forest Management Bureau of the Department of Environment and Natural Resources (DENR).

Fibers from the buri palm are also widely used in handcrafted novelties and gift packaging. Buntal fiber, in particular, is sourced mostly from Palawan, Quezon and Batangas provinces.

For coco coir and other manufacturing inputs from coconut trees, the major producers include the Davao Region, Zamboanga Peninsula, Northern Mindanao and the CALABARZON area. Craft gifts made from these materials include magazine organizers, mats and other home furnishings.

Capiz shells are adopted as an accent or the main material in storage boxes and craft gifts such as wind chimes, photo frames and soap dishes. These can be found in various provinces, including Cebu and Palawan.

Visual appeal is the top consideration when choosing materials and developing designs. Combining different materials in one design is a popular way of creating greater variety in looks and textures.

Growing demand for environment-friendly products is also major influence on raw material selection. Most makers opt for inputs coming from renewable resources or waste products such as coconut shells, used newspaper and magazines. Alice Blue Candle Inc., for instance, uses vegetable-based wax from soy in its scented candles. Salay Handmade Paper Industries adopts recyclable boards instead of chipboard to produce gift boxes.

Several suppliers are offering items with elements that are culturally significant to differentiate their products. Custommade Crafts Center uses handwoven textiles as notebook covers or accents and includes a narrative of the textile’s origin.

Suppliers can customize designs, packaging, logo, colors and dimensions. Samples can usually be produced within one or two weeks, depending on the design and size.

Manufacturing & QC

The manufacturing process is generally labor-intensive. Many steps, including weaving, woodworking and painting, are done manually using tools such as knives, cutters, jig saws, surface planers and paintbrushes.

Subcontracting is a common practice, especially for decorative elements. Makers incorporating handwoven fabrics in their products, for instance, usually procure the cloths from weaving communities across the country.

Assembly, finishing, QC and packing are the stages often kept in-house.

Depending on the product and order volume, manufacturing lead times range from 30 to 45 days for the minimum order quantity.

Most makers have at least three personnel conducting quality checks. These workers usually inspect raw materials and outsourced components, and perform spot checks on products before finishing and packaging.

Product specifications such as color, texture and size are typically checked against buyers’ requirements through manual handling and visual inspection. Third-party testing and certification are done on client request.

Pricing

Handcrafted gifts and premiums are typically priced based on the cost of the raw materials used and the complexity of the design. Order volume, payment conditions and inter-island shipping costs are also considered.

Quotes have been on an upward trend due to rising production costs. Rates of abaca, for one, increased by up to 50 percent due to a shortage caused by the Mt. Mayon eruption in the first quarter of 2018.

Suppliers, however, have generally strived to keep price adjustments to a minimum. In a survey of 14 suppliers conducted by the Hinrich Foundation, most respondents indicated that they will maintain current quotes in the next six months.

Price guide

Price guide: Animal ornaments
Less than $2
Rabbit, deer, rooster or hummingbird; buri, abaca or a combination of these fibers, galvanized iron wire; one or two colors; 4in
$2 to $3
Sea animals such as seahorses, crabs and lobsters; abaca fiber; one or two colors; 6in
$3 to $5
Bunny; abaca fiber; with clothes, basket and other accessories; multiple colors; 8in

Click image to enlarge.

Philippines Sourcing: Philippines Gifts & premiums 2018 Product features of a handcrafted animal ornament
Price guide: Notebooks & notepads
Less than $3
Stitch binding; 17 leaves; handmade paper made from abaca and cogon grass; cover with leather-like finish
$4 to $5
Stitch binding; 80 leaves; handmade paper from abaca and cogon grass; cover with leather-like finish; 4x6 to 5x7in5
$5 to $10
Stitch binding; 90 leaves; notebook slipcover with handwoven abaca-based fabric; may have garter strap; 4x6 to 8.5x11in
Philippines Sourcing: Philippines Gifts & premiums 2018 Product features Typical Features of a handmade notebook
Price guide: Gift & storage boxes
Less than $3
Set; circle, square, rectangle or novelty shape; papier mache; brown finish; various sizes
$3 to $5
Square; laminated capiz; natural or smoked finish; 3.15x0.79in lid; 2,76x2.95in body
$5 to $7
Rectangle; recyclable cardboard; covered with abaca-based handmade paper; pressed flower or leaf embellishment; organic dye; matte or glossy finish; up to 20x20in
Philippines Sourcing: Philippines Gifts & premiums 2017 Product features Typical Component of a handmade giftbox

Philippines Sourcing: Gifts & premiums 2018 Supplier survey

Philippines Sourcing: Gifts & premiums Supplier survey

Philippines Sourcing: Gifts & premiums 2018

• Gifts & novelties • Stationery • Gift packaging

To give buyers first-hand information from active gifts & premiums exporters in the Philippines, we’ve surveyed the manufacturers featured on this site.

Export pricesExport markets & salesProduct trendsChallenges
  • More than 50 percent of the surveyed suppliers intend to keep quotes at current levels for the next six months.

  • Of those planning to raise prices, 50 percent will be keeping increases within 10 percent.

  • Projected price increases are mainly to cover higher production and overhead costs.
  • Nearly 80 percent of surveyed suppliers see export sales increasing in the next 12 months.

  • Marketing efforts of most companies are geared toward North America and the EU.

  • Suppliers intend to promote their products primarily through trade show participation and digital marketing.
  • Adoption of environment-friendly materials will be a strong trend in upcoming releases.

  • The selection of nature-inspired designs will expand.

  • Mixed-media designs will continue to increase in number.
  • Keeping prices competitive amid rising costs remain a major challenge for suppliers.

  • Several companies are having difficulty retaining workers.

  • Some makers identified having limited knowledge of overseas markets and product trends as the main hurdle to growing their business.

Export prices

More than half of suppliers surveyed for this report will not be raising quotes in the next six months.

Some are doing so to keep their prices competitive, and others are bound by existing contracts to maintain current quotes for up to one year. These companies are taking advantage of the Philippine peso’s depreciation against the US dollar. At its close on Aug. 10, 2018, the peso had weakened over 6 percent against the greenback since the start of 2018.

Of those respondents planning to raise prices, 50 percent intend to cap adjustments at 10 percent. The other 50 percent are planning higher increases. Companies are pushing up quotes to cover higher production and overhead costs.

Philippines Sourcing: Philippines Gifts & premiums 2018 Supplier survey export prices

Export markets & sales

Most companies have a positive outlook on export sales in the next 12 months. Of the surveyed suppliers, half are expecting increases of up to 10 percent, 22 percent are projecting a surge of 11 to 20 percent and 7 percent are anticipating higher growth. These companies are optimistic that attendance in upcoming trade shows and releases of environment-friendly products will boost exports.

Fourteen percent of the respondents see no significant change in overseas sales in the coming months, and the remaining suppliers expect a decline as price competition becomes more intense.

Marketing efforts at most companies are geared toward traditional markets in North America and the EU. Of the surveyed suppliers, 38 percent said they will be focusing on the EU, specifically Germany, the UK, Italy and France, because most of the them already have buyers in these markets. The remaining 62 percent are equally divided between those planning to boost exports to the US and those targeting Asia Pacific economies such as Japan, China and Singapore.

Philippines Sourcing: Gifts & premiums 2018 Supplier survey Export Forecast

Suppliers intend to promote their products primarily through trade show participation and digital marketing. Besides Manila FAME, some of the trade shows suppliers are looking to join are Christmasworld in Germany, the Hong Kong Trade Development Council fairs and the Seoul Gift Show in South Korea.

Adoption of environment-friendly materials will be a strong trend in upcoming gifts and premiums from the Philippines. Of the surveyed suppliers, 43 percent will be using abaca, buri and other inputs that are considered renewable resources and 7 percent will be recycling or upcycling materials.

For 29 percent of the companies in this report, nature-inspired designs will be the focus of product development. Examples of these are animal-shaped craft gifts and paintings of nature landscapes on decorative boxes.

Mixed-media designs will also continue to grow in number. Suppliers combine different natural fibers or recycled materials with materials such as metal and glass to create unique products.

Challenges

Keeping prices competitive amid rising costs remains a major challenge for suppliers. Due to intense competition from counterparts in China, Vietnam, Indonesia and other neighboring sourcing centers, many companies opt to sacrifice margins instead of increasing quotes to cover higher spending for abaca fiber and other inputs. Others focus on the midrange, high end, or on niche segments such as specialty stores and gift shops, which are generally less price sensitive.

Suppliers identified labor-related concerns as another major challenge. Makers are finding it difficult to retain workers as most prefer to join industries where the pay is higher and more stable. Some workers also lack interest in craft-related pursuits.

Philippines Sourcing: Philippines Gifts & premiums 2018 Supplier survey Key findings

Other suppliers consider their limited knowledge of overseas markets and product trends as another hurdle to growing their business. Most of these companies started as cottage industries or subcontractors of larger companies.

Financial constraints limit most suppliers’ efforts toward market research, product development and promotion.

Philippines Sourcing: Gifts & premiums 2018 PDF download

Philippines Sourcing: Gifts & premiums 2018

Philippines Sourcing: Gifts & premiums 2018

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Supplier & products

Sections


  • Products
  • Philippine gifts & premiums suppliers

Industry overview

Sections


  • Highlights
  • Exports
  • Competitive advantages
  • Challenges
  • Industry composition
  • Philippine gifts & premiums suppliers

Charts


  • Exports of gifts & premiums
  • Supplier locations map

Product features

Sections


  • Highlights
  • Materials & designs
  • Manufacturing & QC
  • Pricing
  • Price guide
  • Philippine gifts & premiums suppliers

Supplier survey

Sections


  • Highlights
  • Export prices
  • Export markets & sales
  • Product trends
  • Challenges
  • Philippine gifts & premiums suppliers

Charts


  • Export prices
  • Export forecasts
  • Key findings

Philippines Sourcing: Gifts & premiums 2018 Supplier list

Philippine gifts & premiums suppliers

Click company names below marked Active to view verified suppliers and products featured on GlobalSources.com.

Suppliers featured on
Supplier statusGifts & noveltiesStationeryGift packaging
Alice Blue Candle Inc.Active  
Cagayan de Oro Handmade Paper CraftsActive
Crissander EnterprisesActive  
Custommade Crafts Center Inc.Active 
Disenio de CrafticoActive 
Fae Décor Crafts Active  
Greenflex International Corp.Active
JRCS Enterprise Active 
Marjorie B. Arellano Handicrafts
Active 
MERR-C Society for the Word Foundation Inc.Active  
Rathbone & Co. Inc.Active  
Saffy Inc.Active
Salay Handmade Paper IndustriesActive
Yssa’s Crafts Active