The jewelry industry in the Philippines has been around for a long time now. In fact, there are about 250 businesses, plus thousands of cottage type operations engaged in the industry with a pool of more than a hundred thousand workers. But around 50% of them are small- and medium-scale enterprises. The largest jewelry manufacturers account for less than 25%.

It is with this reality that the government finds a great opportunity in developing the Philippine jewelry industry. After all, the country is blessed with an abundant supply of gold and gemstones such as opal, jasper, quartz, and jade, among others. Add to that a highly-skilled labor force and Philippine jewelers may very well prepare for the bigger, global marketplace.

But the growth of the industry will have to go at a faster rate, especially for the small industry players who need help in extending their reach beyond the domestic market.

Colored stones are "in" according to Italian jeweler Ilios

The Big Leagues
It took some time to get an interview with Jewelmer, the Philippine company that produces the famous South Sea pearls. But thanks to web-based e-mail – after a flurry of messages back and forth - Philippine Business finally caught up with the firm’s top officials at the International Jewelry Trade Fair in Kobe, Japan – one of about a dozen jewelry trade shows around the world that Jewelmer participates in annually.

“Our main purpose for attending fairs,” says Jewelmer marketing manager Angela Poblador, “is to strengthen our competitive position with other pearl producing countries and jewelry manufacturers.”

And compete, they must. Australia and Indonesia also produce the highly prized South Seas (a 12-mm to 16-mm, 39-strand necklace can fetch up to US$70,000), although those made in the Philippines come out cheaper because of lower wages in the country. Jewelmer is probably the biggest Philippine jewelry company – with integrated operations in pearl farming, jewelry manufacturing and retailing. Around 85% to 95% of Jewelmer’s operations are concentrated on exports, says Poblador.

For the second time last January 2003, six Philippine jewelers including Jewelmer showed their gems and wares at the VicenzaOro (International Exhibition of Gold Jewelry, Silverware and Watches) in Italy. This fair is held thrice a year and considered the world’s top jewelery trade fair where buyers from all over the globe check out new designs and spot trends. The Center for International Trade Expositions and Missions (CITEM) – the government body that helps local companies expand their markets abroad through participation in trade fairs – reports that some US$479,000 worth of combined orders were booked for the country’s delegation at the VicenzaOro fair in January alone. While only 20% of the country’s total jewelry production are being exported, exports of precious jewelry in dollar terms have grown 30% to almost US$21 million from 1997 to 2000.

Participating in trade fairs around the world is one of the vehicles by Philippine jewelers to get into the lucrative export markets abroad. The world’s consumer market for fine jewelry has already topped more than US$40 billion in 2001, about half of which are sourced from imports. In the United States – the top importer of fine jewelry – sales are expected to increase six to seven percent annually in the next few years.

Italy, on the other hand is the world’s top producer of fine jewelry – with about 8,200 jewelry factories producing some US$6.4 billion worth of fine jewelry every year. As Europe’s fashion epicenter, Italy’s jewelry designers unveil yearly collections of the latest designs, shapes, color and textures.

One of the country’s top exporters of fine jewelry is Ilios Jewellers, a Rome-based jeweler, which established a factory in 1996 at Subic. This factory now employs about 40 Filipino workers. Doreen Troisi, director for Ilios, says they mainly export to Italy. Other export markets says Ms. Troisi are Sweden, United Kingdom, Chile, and Southeast Asia.

But while Ilios exports 90% of its production – enabling it to earn bigger revenues in dollars, thanks to its Italian connection (“We have our own stone-cutting division, and we use the latest Italian technology and machinery,” says Ms. Troisi) – most of the country’s old jewellers, running small-to-medium operations need help in reaching out to export markets.

The tribe of Meycauayan
Around 60% to 70% of the country’s total jewelry production is concentrated in the town of Meycauayan, some 16 kilometers northwest of Manila. While the provinces of Laguna and Cavite are replete with electronics-churning factories, this Bulacan town is home to thousands of cottage industry, sized firms, specializing in the art of making fine jewelry pieces.

The artisans here trace their origins to Chinese goldsmiths who came to the country around the 13th century. Production is huge, with gold consumption in the range of 50 to 150 kilos of gold a week, according to Cecilia Ramos, chair of the Meycauayan Jewelry Industry Association (MJIA). And yet, only 15% of the town’s production go to export markets.

“We are 15 years behind in terms of technology,” says Ms. Ramos. The industry’s weakness in technology is all the more crucial in the export markets, where the ability to mass produce and fill volume orders is no less important than quality craftsmanship – for which Filipinos are hands down winners.

Financing is also a major problem. The typical jewelry operation – employing an average of six to seven people – can’t afford a P15-million complete set of modern machinery. Thanks to persistent lobbying efforts by Meycauayan’s trade association, the Philippine Jewelry Center was established to provide training, common service facilities like casting and stone-cutting machines, and help jewelers broaden their markets.

In 1998, the Jewelry Industry Development Act (RA 8502) was passed, boosting an industry previously hobbled by high import duties. While the country has ample supply of gold and semi-precious stones such as jade and opal, in-demand components such as diamonds and other precious stones, as well as some capital equipment are imported from around the world. With the law, jewelers become entitled to zero import duties and exempted from excise taxes. The only weak point of this law, according to Ramos, is in its implementation.

A little help can go a long way
“Our eventual goal is to sell abroad,” says Ramos, herself a jeweler since 1979, although her husband’s family had their jewelry business in Bulacan since 1950. But, as her experience tells her, marketing for exports is not that easy. Although government agencies such as the Department of Trade and Industry and CITEM extend help, the costs of going to trade fairs have to be shouldered by the company. Ramos says a firm must join trade fairs for at least five straight years – and chances are the first order comes only by the third year.

A ray of hope has shone on Philippine jewelers when the European Commission extended aid to MJIA. “This is one of the ways to shorten the 15-year gap,” says Ramos. For starters, the project sent consultants from Europe to train Filipino jewelers on how to use the machinery in the jewelry center and also set up a model factory. A roadshow in Europe subsidized by the commission is scheduled for January next year that will take Bulacan jewelers to four countries and partake in a study grant in Italy.

Ramos is hopeful that after this training and consultancy, the technology gap of the Philippine jewelers with other players in the world will be shortened further to just five years. And in a world of fluid capital and increasingly networked information, the single thing that sets apart the Filipino jewelry artisan and can make a difference in the global marketplace is his craftsmanship – a fact noted even by Troisi of Italian jeweler Ilios who said, “the potential is there for the Philippines because Filipinos are very artistic.” Even the European consultant currently training Meycauayan jewelers is amazed with what Filipinos can do using crude machines, Ramos says. Just imagine what more they can do when the technology factor is improved.