The Market Monitor Minding the Nation's Business
By Riza Lozada
The country can attain its export revenue target of $100 billion by 2019 upon the implementation of development strategies and growth in services exports, but the government said producers of local products should raise their global competitiveness.
The Department of Finance (DOF) said the export sector is seen to gain from the country’s “rejuvenated relations” with countries such as China and Russia.
Senen Perlada, director of the Department of Trade and Industry’s (DTI) Export Marketing Bureau (EMB), said the ambitious target of hitting $100 billion worth of exports yearly would be achieved when interventions based on the Philippine Export Development Plan (PEDP) 2015-2017 are implemented.
Perlada cited the first strategy under the present PEDP, which is designing comprehensive packages of support for key and emerging sectors.
Such package consists of thorough and in-depth analysis of sector-specific global-value chain, investment and marketing promotion, business matching, training and capacity building, financing options, and support for innovation, product development and design.
The PEDP identified other key strategies to boost the competitiveness of the export sector, including strengthening the national quality infrastructure (NQI) to upgrade the quality and standards of export products, removing unnecessary regulatory impediments to the movement of goods and delivery of services, and raising the productivity and competitiveness of Philippine enterprises.
Perlada, who is also the executive director of the Export Development Council (EDC), said the share of services to the country’s total exports has increased from 19 percent in 2006 to 32 percent at present.
He said export of services have been growing much faster than export of goods. “Goods dominate but services are catching up,” he said.
Perlada said about 68 percent of the revenues are derived from the sales of merchandise or goods, while the remainder is accounted for by services.
The latest Economic Bulletin submitted to Finance Secretary Carlos Dominguez III urged the government to implement the necessary agenda and programs vital to improving the export sector that weakened in November last year.
The Philippine Statistics Authority (PSA) reported that exports fell 7.5 percent to $4.732 billion in November from $5.118 billion in the same month the previous year.
In the first 11 months last year, the country’s exports declined by 5.2 percent to $51.361 billion from $54.168 billion in 2015.
Finance Undersecretary and Chief Economist Gil Beltran said in his report to Dominguez that infrastructure development, free trade and bilateral trade agreements, as well as the empowerment of micro, small and medium enterprises (MSMEs) should be pursued.
“We should continue infrastructure development, especially in port areas to enhance cross-border trading; the pursuit of free-trade and bilateral trade agreements with other economies and regions; and capacitating MSMEs to tap export markets,” Beltran said.
Based on the DOF data, around 60 percent of the country’s exporters are MSMEs, thus, enhanced access to credit will further improve the export capability of these small entrepreneurs, Beltran said.
Dominguez earlier said President Duterte wanted to explore or expand opportunities with countries other than our traditional trading partners in line with government plans to further open up the economy to foreign investors.
To date, only about $46 million worth of Philippines goods are shipped to Russia every year, while China ranks as the fourth-largest buyer of the country’s exports at $5.58 billion as of November 2016.
China and Russia are considered eyed by the government as major destinations for Philippines agricultural produce and manufactured crafts, following the President’s rebalanced foreign-policy directions.
Based on the PSA data, the drop in exports in November 2016 came after 5.1 percent and 9.1 percent increases in September and October, respectively.
The drop was brought about by the 10.6-percent decline in manufactured goods exports as well as electronic products that contracted by 7.9 percent year-on-year and accounted for 53.82 percent of the total.
In contrast, exports of agro-based products significantly increased by 28.62 percent owing to higher prices of some major export agriculture commodities, such as banana and sugar, that rose by 3.2 percent and 10.5 percent, respectively.
In November, total exports to other Southeast Asian countries, East Asia, the European Union and the United States dropped, but the country registered positive growth in other countries, although still low at 3.8 percent.
Japan remained the top destination of exports, accounting for 19 percent of the total exports for the month followed by United States and Hong Kong with 13.9 percent and 13 percent shares, respectively.
Only exports to Hong Kong, China, and Taiwan posted positive growth among the top 10 market destinations of Philippines goods as compared to the same period last year.