The Philippines needs to increase the competitiveness of its export sector, which is seen to recover this year, amid an expected boost from its rejuvenated relations with countries like China and Russia, the Department of Finance (DOF) said.
According to the latest Economic Bulletin submitted to Finance Secretary Carlos Dominguez III, the government should implement the necessary agenda and programs vital to improving the export sector that weakened in November last year.
Earlier, 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 in 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.
Amid slowing exports, 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; 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 wants 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 Philippine 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 being eyed by the government as major destinations for Philippine agricultural produce and manufactured crafts, following President Duterte’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 State 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.
