The slowdown in the Philippine economy and the depreciation of its currency has affected national forklift and materials handling equipment sales.

Slow sales were aggravated by unstable political conditions, which dampened investor sentiment and confidence, particularly in the construction and mining sectors, according to an industry expert.

Johnny Valencerina, forklift consultant for Monark Equipment Corp, said the foreign exchange rate deteriorated from 40 pesos in 2000 to an average of 51 pesos against the US dollar in 2001.

However Mr Valencerina was optimistic the domestic forklift and materials handling equipment would recover this year. "We have to be creative in marketing our products," he said.

Monark Equipment is the exclusive dealer for Caterpillar forklifts and Tadano cranes and earthmoving equipment in the Philippines. The bulk of Monark's business is in cranes, graders, bulldozers and other earthmoving equipment, but forklifts constitute about 20 percent of the business.

Mr Valencerina, who has been in the materials handling industry for 12 years, said that, in the difficult economic climate, "we have to be more creative in dealing with customers, by offering them buy-back arrangements on equipment".

Monark has implemented a scheme in which it buys equipment back from customers, after a specified time, for re-selling to other buyers. About half of Monark's customers prefer to buy used equipment, Mr Valencerina said.

Another strategy is to offer clients rent-to-own equipment, where equipment is rented for a period of time, and the customer retains ownership when the rental term expires.