A Quick Look at the Growth of the Philippine Furniture Industry

Philippine furniture is one of the priority export products given assistance and support by the government. Export has grown at an annual average of 11 percent in the last ten years. In fact, it has made significant inroads in the highly competitive export market. Developments in the industry have also seen the increase in the number of production infrastructures and highly skilled craftsmen and manpower supporting the surging growth of the industry.

Early beginnings

Furniture craft first came to the Philippines in the 16th century when cabinet makers from Spain were brought in by colonial merchants who saw distinct possibilities for good furniture products in the Philippine hardwood in abundance. Filipino craftsmen learned quickly not only the art of masonry but also intricate carvings and adornments on doors and other church furnishing.

By the 18th century, distinct regional styles of furniture-making had emerged in the Philippines, and the whole range of European domestic furniture was not only being replicated but redesigned to suit local tastes and lifestyles.

Casualness, comfort and practicality were values that arrived during American colonial times in the early 1900s. These times gave birth to the rattan furniture industry, which continues to lead the furniture industry today.

The ban on the export of rattan poles in 1977 led to the establishment of more rattan factories in Manila and Cebu. Particularly in Cebu, traders who used to export rattan poles to the U.S.A. and Taiwan, upgraded their production to unfinished rattan parts such as chair backs, legs and seats which were then exported to furniture assemblers.

Later developments saw more downstream value-added activities. With continuous production improvement and product development, the furniture makers were soon able to export complete furniture pieces which attracted the attention of the international market. In the 80’s, manufacturers began to produce assembled furniture from blueprinted designs provided by buyers. The value-added chain was completed by the late 80’s when the companies started undertaking their own product development and design manufacturing, assembly and final finishing.

The history of the industry is reflective of: rich craft heritage; eclectic influences; variety of locally available materials; and native artisans with excellent design flair and deft hands. These are the same reasons for the industry’s subsequent growth and the wide acceptability of its products. This culture of adaptation is the story of the Philippine furniture industry.

Industry structure

Over the years, export furniture production in the Philippines rapidly evolved, expanding its scope to become Asia’s acknowledged leader in a wide range of well-designed medium to high quality furniture products.

The Philippines ranks as one of the world’s best producers of fine furniture, from the traditional to the casual contemporary to the highly experimental. The furniture industry manufactures affordable products of exquisite craftsmanship which is the successful result of modern technology combined with human creativity and eye for beauty.

From its prime position as the major source of creatively-designed wicker and rattan furniture, the industry has success fully diversified into wood, metal, stone, bamboo, leather and mixed media furniture collections.

The Philippine furniture industry has metamorphosed into a highly diversified manufacturing sector. This is evident in the broad product range presently offered by the manufacturers to the export market.

Manufactured products may be classified into two broad categories: the leg items which include chairs, tables, beds, headboards and settees; and the case goods such as cabinets, desks, wardrobe cases, chest of drawers, dressers and kitchen storage units.

In terms of materials, products have branched out from rattan and buri wood to metal, stonecraft, bamboo and plastic. New forms also emerged with two or more materials and in combination with grasses (seagrass), shells, coconut lumber, shells and leather.

The wide product spectrum incorporates the inherent skills of the Filipinos which add value to the finished product. These skills include weaving, wood carving, marquetry, laminating wooden carcasses with rattan and wicker, leather, fossilized stone, and inlaying shells, coconut shells, animal bone or horn.

The diversification of furniture is also marked by the shift from the production of low-end furniture to the medium and high-end lines. This means emphasis on quality, design and material rather than on mass production of pieces. This is attributed primarily to growing competition globally.

Filipino furniture firms have likewise expanded their capabilities to include production of contract furniture. They have started to be recognized as a preferred source of furniture for hotels, restaurants, offices and other public institutions.

Labor force

Industry estimates place the number of furniture firms at 15,000 directly employing 500,000 workers. Another 300,000 are indirectly employed. Subcontractors and suppliers are estimated to be about one million.

Of the 15,000 manufacturers, dominated by SMEs or 90% of total, about 3% employ between 151 to 800 workers, 7% employ 31 to 150 workers, 60% employ 6 to 30 workers while the remaining 30% have 5 or less workers. About 9,750 are cottage or small manufacturers.

Single proprietorships and family-owned corporations are common in the industry. While majority of the firms are wholly owned and managed by Filipinos, a number of companies are partly owned by foreign investors.

There are three major furniture-making areas in the country: Cebu, Metro Manila and Pampanga. These are the three production hubs of the furniture industry.

Cebu, where the larger rattan manufacturers are based, produces at least 60% of total furniture exports. The Cebuanos specialize in rattan and fossilized stone furniture, as well as in mixed media items. Located in Metro Manila are large numbers of small to medium-sized companies which are increasingly using a combination of materials. Some large producers of wooden furniture are also based in Metro Manila. Pampanga, on the other hand, is well-known for its hand carved wooden furniture, and nearby Bulacan is recognized for inlay work using bone and shells.

In these production centers, ancient crafts survive and are combined with high technology. Generally, material producers and manufacturers are able to meet quality standards and mass production requirements of the export market. The broad acceptability of Philippine furniture overseas may be partly traced to a heritage that encourages combining the old and new, and to a lineage of artisans endowed with discriminating eyes and deft hands.

Production capacities of furniture firms have been gradually increasing since their early beginnings up to the present. Majority, in fact, have reported unutilized capacities which can accommodate demanding requirements of overseas clients. Several companies have similarly established a network of subcontractors who can fill the demand during peak seasons.

Top export markets of Philippine furniture are Japan and the United States, which constitute 72% of the total market.

Competitiveness factor

The industry is said to employ highly-skilled workers who are products of both formal and informal training. Training programs are offered by both government and non-government institutions while regular courses on furniture-making are taught in various technical education institutes and schools of arts and trade.

Despite all these institutions, however, the industry still depends largely on the handing down of skills from one generation to the next and on-the-job training.

The industry also employs engineers and designers with university degrees. The former normally serve as leadmen in various production sections or as production managers while the latter are involved in research, product development and design.

Major raw materials for production include rattan poles and splits, lumber, metal bars or rods and fossilized stone and horn. Other inputs include fittings and finishing materials.

Rattan poles used by the industry are either sourced locally or imported.

In previous years, the traditional suppliers included Vietnam, Malaysia and Myanmar. Imported rattan poles are mostly those with a diameter of 2 cm or more.

Lumber is likewise available in the domestic market but manufacturers have already started using imported species. Lauan and tanguile are the commonly used species which are locally sourced. Imported species may be Honduras and Brazilian mahogany, pine, oak, beech, cherry and maple.

Metal bars and rods are mainly sourced from local producers. Wrought iron and aluminum are principally used for metal furniture.

Rattan furniture companies are well-equipped with the machinery and equipment necessary for efficient production. Among these are straightening machine, splitting machine, sizing machine, crosscut saw, surfacer, thicknesser, sander, pneumatic jig, and finishing booth.

Semi-mechanized production is the norm in wooden furniture manufacturing. Most factories are equipped with cut saw or radial saw, jointer-planer, thicknesser, planer, table saw, band saw, shaper, router, drill press, universal and wide belt sander, boring machine, hot press and multiple boring machines.

Aware of the growing need to improve their productivity and competitiveness, majority furniture firms are investing in technology to streamline their production.

Source: Chamber of Furniture Industries of the Philippines and Department of Trade and Industry