China’s seizure of the Scarborough Shoal reminds me of the collapse of Cebu’s once-thriving furniture export industry. During the mid-1980s to the early 2000s, Cebu’s furniture export business flourished. I can personally attest to its success because it provided my family and many of our neighbors with a decent livelihood. In 1986, I remember my father earning ₱2,300 a month—nearly twice the salary of a public school teacher at that time. He worked as a foreman for a furniture company. I can no longer recall the company’s actual name, but many people referred to it as “Cenapro” because it occupied the former plant of Cenapro Chemical Corporation in Alang-alang, Mandaue City. The company started with only one carpenter—my father—who was responsible for producing the prototype furniture pieces. When his designs impressed the buyers, the business expanded rapidly. Within a short period, the company became so successful that it rented two additional buildings beside the original one, bringing its total to three large factory buildings. Most of the workers came from Barangay Mactan in Lapu-Lapu City. At that time, Barangay Mactan was well known as a major source of highly skilled craftsmen capable of producing export-quality furniture.
Unfortunately, after only two years, the company went bankrupt because of corrupt management. The manager operated a double-payroll scheme. Although the company owner was informed that each worker was being paid ₱50 per day, the manager actually gave the workers only ₱30 a day while pocketing the difference. When the workers eventually discovered the fraud, they revolted in anger and nearly killed the manager. The manager and his secretary were able to carry out the scheme for so long because the company’s owner was from Macau and was not personally present to oversee the business’s daily operations.
In 1985, Maitland-Smith, a furniture manufacturing company, became well known for its fine craftsmanship in MEPZA and was recognized for paying its workers good wages. The company is still operating today, but it no longer offers the competitive salaries it once did.
In 1987, I learned wood carving, and in 1988 I worked under a subcontractor at Santos Lumber. At the young age of 13, I earned between ₱600 and ₱700 a week. My earnings were not fixed because I was paid on a piecework basis. At that time, the regular daily wage was only ₱30, so I was fortunate to earn considerably more through my craftsmanship. From 1987 onward, the number of furniture export companies in Cebu grew dramatically. As the industry expanded, the number of carpenters and wood carvers also increased.
In 1995, I worked as a carving subcontractor at Wicker and Vine Inc. at the only age of 20, but by then the income was no longer as rewarding as it had once been. Furniture companies had realized that there was now an abundant supply of skilled carpenters and carvers. Because of this surplus of labor, they had the advantage of hiring workers who were willing to accept lower rates. Although many business owners were already earning substantial profits, they continued to push labor costs downward, causing many furniture workers to struggle financially.
In 2000, I also worked as a carving subcontractor at Berben Wood Industries, but the compensation remained inadequate. Faced with declining wages and limited opportunities, many skilled furniture workers from Cebu sought employment abroad, particularly in China, Vietnam, and Malaysia. China, in particular, attracted many Cebuano craftsmen by offering salaries of around ₱50,000 per month—a very attractive income at that time. Many accepted these opportunities. As Filipino workers shared their expertise and craftsmanship overseas, those countries gradually acquired the knowledge and techniques needed to develop their own furniture industries, eventually becoming strong competitors in the global market. China, for example, learned many aspects of furniture manufacturing from experienced foreign craftsmen, including Filipinos, and rapidly expanded its furniture industry. By producing furniture on a massive scale at much lower costs, Chinese manufacturers were able to offer products at prices that many international buyers found difficult to resist. As a result, a significant number of customers who had previously sourced furniture from Cebu shifted their purchases to China.
In my opinion, this was one of the major factors behind the decline of Cebu’s once-booming furniture export industry. Some furniture businessmen blamed the government, while others attributed the decline to the economic recession in the United States. However, even before the U.S. recession, many American buyers had already begun importing furniture from China because of its lower prices.
I believe the deeper problem was the failure of both business owners and the government to recognize the true value of our skilled workers. Had they invested more in their welfare, provided fair compensation, and developed long-term strategies to retain their expertise, Cebu might have remained one of the world’s leading furniture-exporting centers, continuously fulfilling large orders from overseas markets.
A country’s skilled workforce is one of its greatest assets. Governments and business owners should never neglect the welfare of their workers. When skilled laborers are forced to leave in search of better opportunities, they inevitably bring their knowledge and experience with them, strengthening the industries of other nations while weakening their own. Human capital is the foundation of every successful industry, and without it, even the strongest economy will eventually collapse.
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Cebuano version of this post: Gipahagba sa Tsina ang Furniture Export sa Sugbo