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Philippines: ‘Investments to address declining exports’
MANILA, Philippines — There is a need for more investments in the country to address declining exports, as these will play a crucial role in enhancing the Philippines’ capacity to produce and export more products with a higher value, according to Trade Secretary Alfredo Pasual.
“Evidently, we need to diversify our export basket, and investments play a key role in developing Philippine capabilities to produce and export more of higher value products. We will focus on investment attraction and industry development in sectors where we have established capabilities that can serve as a solid foundation for export growth and are well-positioned to seize opportunities in emerging trends. These are: industrial, manufacturing, and transport, technology, media, and telecommunications, and health and life science,” Pascual said.
“Industry players expect the decline in exports to be temporary, as global investments in semiconductor manufacturing have been increasing significantly. Thus, we need to position the Philippines to take a greater share of this increasingly important global value chain,” he added.
Latest data from the Philippine Statistics Authority (PSA) showed that the country’s merchandise export sales in February dropped by 18 percent to $5.1 billion.
The Philippines’ overall merchandise export performance in February was influenced by the cooling down of global demand for electronic products, posing a decline on the country’s top export sector — electronics.
The Department of Trade and Industry (DTI) continues to pursue initiatives to strengthen the country’s semiconductor industry.
These efforts include its collaboration with the Semiconductor and Electronics Industries in the Philippines Foundation Inc., where DTI led a delegation in January to the US’ Consumer Electronics Show (CES) 2023, dubbed as the “most influential tech event in the world.”
“The country’s participation resulted in potential cooperation between US-based high-tech companies with Philippines-based companies. The CES 2023 participation was followed through by trade and investment promotion activities during the Presidential working visit to Japan in February where the President was able to secure multi-billion investments in the Philippines’ semiconductor industry,” the DTI said.
Meanwhile, to support exporters in their efforts to widen their reach in the Middle Eastern market and beyond, the DTI organized an Outbound Business Matching Mission (OBMM) to the Gulf Cooperation Council (GCC) in time for Gulfood 2023, one of the world’s largest food and beverage sourcing event based in the United Arab Emirates.
“Through the business matching activities, the participating Philippine exporters were able to book and negotiate sales amounting to over $10.8 million in total,” the DTI said.
Among the country’s top export markets as of February were Japan ( $822.7 million), United States ($756.0 million), China ($611.6 million), Hong Kong ($526.9 million) and Singapore ($310.6 million).
“To unlock the export potential of the Philippines, we need to better understand the needs of our clients, utilize our preferential trade arrangements, such as Regional Comprehensive Economic Partnership (RCEP), make our products and services more visible in international markets through trade promotion, and more importantly, invest and expand our production capabilities to meet the demands of foreign markets” Pascual said.
Moreover, in line with foreign investments, Board of Investments (BOI) Investment Promotion Services executive director Evariste Cagatan said that they continue to work to realize investment pledges made during President Marcos’ various foreign trips.
“The investment pledges that we received from the President’s visits to different countries, we continue to work these out so that we can realize them. Of course those are all investment leads, there’s still a lot that needs to be done to realize these investments,” Cagatan said in Filipino during a news forum over the weekend.
“But it’s good to note that while we are working to realize these investment pledges, in the BOI, we are seeing good developments,” Cagatan said, highlighting that the BOI has approved P463-billion worth of investments in the first quarter.
The first quarter figure is a 155-percent increase from the P182 billion worth of investments approved by the BOI in the first quarter of last year.
Of the total, approved foreign investments surged by a dramatic 3,722 percent to P165 billion from only P4.33 billion a year ago.
Similarly, local investment approvals also posted a 68-percent growth to P298 billion in the first three months from P177 billion in the same period last year.
“With investment prospects being very positive, and as we continue to receive serious interest from global investors, we are definitely on track to meeting our new annual investment target of P1.5 trillion,” Pascual said earlier.
The bulk of foreign capital came from Germany (P157 billion) followed by the Netherlands (P2.7 billion), the United States (P1.2 billion), Japan (P524 million) and the United Kingdom (P293 million).
In terms of regional dispersion, investments in Western Visayas led the way with P293.3 billion while Calabarzon took second place with P112.7 billion. This was followed by Ilocos Region (P38.7 billion), Davao Region (P3.6 billion) and Eastern Visayas (P3.6 billion), completing the top five regions.
Source: https://www.philstar.com/business/2023/04/18/2259604/investments-address-declining-exports