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Philippines: Exports to grow 2 to 4% this year
MANILA, Philippines — Total exports of the country would likely grow by two to four percent this year, with the increase to be driven mostly by the services sector, the Department of Trade and Industry (DTI) said over the weekend.
For next year, the DTI expects total exports to rise by four to six percent on expectations that ongoing trade tensions between the US and China would be resolved.
Trade Secretary Ramon Lopez told reporters on the sidelines of the National Export Congress 2019 that the country’s total exports covering goods and services are seen to increase by two to four percent this year.
He said total exports reached around $95 billion last year.
This year’s growth is expected to be driven by the services sector, which is seen to post single-digit increase from last year.
“What’s growing for us is IT-BPM (information technology – business process management). That is still strong and we have stronger creative economy, creative services, graphics, design, game development, software development, these are service winners,” he said.
Even without government support, he said services exports have been growing. If the sector would be given proper government support, he said this sector could even grow more.
Exports of goods, meanwhile, are seen to end the year with flat growth from an initial expectation of a two to four percent uptick.
“While we were growing in the first half, there was some hit from the China-US trade war. All countries are slowing down. We’re not insulated because to a certain extent, even maybe 25 percent of our exports, not too big, but still it has some impact when it comes to US-China trade war because we are part of the supply chain,” Lopez said.
For next year, he said the DTI hopes to see total exports grow by four to six percent.
The outlook for next year is based on expectations there would be a resolution to the US-China trade conflict.
“We hope there is still settlement to this China-US trade war,” Lopez said.
Lopez said the DTI is banking on an improvement in outbound electronics, furniture and fixture shipments, as well as continued increase in service exports.
Risks to growth, meanwhile, are high costs of raw materials, lack of infrastructure, logistics and trade promotion.
Lopez said government is already taking steps to address some of the risks such as infrastructure and high logistics costs through the Build Build Build program.
For trade promotion, he said the government is looking to spend more to help exporters market their products abroad through participation in international trade fairs.
“Right now, we are not able to give the needed support. Very minimal support. For example, in an expo, you can only sponsor one booth. Imagine, 3,000 booth expo in Hong Kong, government can only sponsor one booth. The others cannot afford the rental fee. That’s the reality. This means actual peso support is needed there,” he said.
Given the expected growth for this year and next year, he said the country is still on track to attain the $122 billion to $130 billion target for total exports by 2022 under the Philippine Export Development Plan.
“We are still on track as to the 2022 numbers,” he said noting the Philippine economy is not mainly dependent on exports and the country’s exports continue to grow despite challenges as new products and markets are being developed.
Source: https://www.philstar.com/business/2019/12/09/1975364/exports-grow-2-4-year#LssKCfuutg4DSSFq.99