Businesses in the Philippines should take advantage of the global economy’s solid footing as it is expected to support the country’s trade performance, especially in terms of exports, the National Economic and Development Authority (Neda) said.
Neda-attached agency Philippine Statistics Authority (PSA) reported that the country’s total trade picked up by 10.0 percent to $12.4 billion in February 2018 backed by imports that grew by 18.6 percent as all commodity groups sustained positive gains.
On the other hand, merchandise exports fell for the first time since November 2016 due to lower receipts from total agro-based products, manufactures, and petroleum products. Among agro-based products, export of coconut products fell by 50.8 percent from a high 66.9 percent growth in 2017.
Neda Officer-in-Charge and Undersecretary for Policy and Planning Rosemarie Edillon said this is due to the lingering effects of tropical storms that hit Visayas and Mindanao during the latter part of 2017 as well as the substitution of coconut oil with more competitively priced palm oil in some markets.
Edillon also said that while the performance of Philippine exports is lukewarm with the easing of global manufacturing production growth, the domestic manufacturing sector appears to remain buoyant. Based on the results of the Monthly Integrated Survey of Selected Industries for February 2018, Philippine manufacturing grew by 24.8 percent in volume and 23.6 percent in value.
Neda remained optimistic that the country is set to benefit from the global economy. Based on the outlook of the International Monetary Fund, global growth is expected to reach 3.9 percent until 2019, higher than last year’s 3.7 percent.
“It is essential for the national government to continuously support Philippine trade, especially exports, by providing an enabling environment to become globally competitive,” Edillon said.
She added that businesses in the Philippines will largely benefit from timely and relevant information on export procedures and documentation, as well as on products that are currently being demanded in the global market.
“For instance, existing exporters to the U.S. and those planning to expand to the U.S. market will be glad to know that the U.S. Generalized System of Preferences (GSP) has been extended until December 31, 2020, following the signing of the U.S. Consolidated Appropriations Act last month,” Edillon said.
The U.S. GSP covers about 18 percent of Philippine exports to the country—including non-alcoholic beverages, electrical machinery and equipment parts—or about $1.5 billion worth of exports in 2017.
She noted that agricultural exports are also seen to expand following the ratification of the country’s free trade agreement with the European Free Trade Association States at the Senate last month, as it covers 90 percent of tariff lines for agricultural products.
Aside from the ASEAN region, Edillon encouraged exporters to tap non-traditional markets to boost trade, including Russia, Malta, Poland, United Arab Emirates, Italy, India, Belgium and Mexico.
“Moving forward, it is essential for the national government to continuously support Philippine exports. Increasing the visibility of Philippine-made goods is also essential to increase its marketability and encourage demand,” Edillon said.
She added, however, that the government must be able to factor in the downside risks of the rising trade tensions between U.S. and China, which can disrupt global trade.