Business
Statement on Export
Performance in
Q1 2019 Secretary
Ramon M. Lopez,
Department of Trade
& Industry
B
Secretary Ramon M. Lopez,
Department of Trade & Industry
ased on the latest preliminary data from
the Philippine Statistics Authority (PSA), our
country’s merchandise export performance in
the first quarter of 2019 has declined by 3.1%.
Specifically, Electronics, which comprises more
than half of our merchandise exports, dipped by
1.7% to US$ 8.8B. Non-electronics, on the other
hand, decreased by 4.8% to US$ 7.5 B.
In general, we consider this as a reflection of
the slowdown in the global economy. Exports
of our Asian neighbors decreased even more: South Korea by
8.7%, Indonesia by 8.3%, Singapore by 6.3%, and Japan by 3.9%.
Out of 11 trade-oriented Asian economies, 9 countries declined in
their export performance and only Vietnam and China registered
positive performance.
The Philippines, as part of a global production network is being
affected by the negative sentiments brought by the US-China Trade
War, since US and China are the top trading partners. According to
industry players, global demand for electronic parts and final goods
has been shrinking and will continue to weaken in 2019. In the case
of the Philippines, this has been mirrored in the decline of exports
in certain electronics sub-sectors such as components and devices,
control and instrumentation, and telecommunication products to
major markets like Singapore and Hong Kong. Meanwhile, weak
orders from their principals have weighed down on major PH
exporters of Non-electronics such as machinery and transport as
well as agri-based exports (e.g., sugar and coconut). Similarly, our
exports of wood manufactures continue to be hounded by weak
orders from the principals of major PH exporters.
Backed by robust domestic demand, firms are finding more
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lucrative opportunities to sell in the local market. For example, a
quick check with a major producer of shrimps and prawns revealed
that they stopped exporting and instead concentrated their sales
and distribution in the domestic market. This can partially explain
the 22% decline of our exports of shrimps and prawns in the first
quarter of 2019.
Additional feedback from major players revealed that our exports
are hampered by lingering issues they encounter on costs and
inefficiencies in transport and logistics. This continues to slow down
the turnaround time in the production and shipments of exporters.
Supply issue has affected export mainstays such as fresh and
processed mangoes: season is delayed and shortened due to
double whammy of La Nina last year during flowering season and El
Nino this year.
In the case of chemicals, there remains the lingering issue of
the policy concerning controlled and regulated chemicals, which
hampers the turnaround time of our exporters from production to
market.
As part of our action plan, we are prioritizing addressing the
core issues above (i.e., supply, competitiveness, port operations/
logistics, and infrastructure gaps (e.g., R10 is now operational, etc)
with relevant government agencies consistent with the Philippine
Export Development Plan.
We are continuously working on diversifying our export offerings
and destinations. In particular, we are looking at focusing our
promotional efforts for the following products and services,
among others which we consider as export growth drivers: office
equipment, consumer electronics, motor vehicle and motor vehicle
parts, high-value coconut products (e.g., MCT coconut oil), forest
products (e.g., plywood, fiber board, etc.), and wearables (e.g.,
footwear, handbags, etc.). On services exports, audiovisual / creative
industries (e.g., film, animation, game development), healthcare
information management systems, software development, and
tourism-related services will receive more focus.
DTI is also pursuing trade initiatives to increase exports to trade
partners to help increase exports. Based on recent negotiations,
Indonesia has revoked anti-dumping on bananas and allowed
for the exports of shallots. They will also invest on coffee
manufacturing and processing. There are also talks with Singapore
on importation of more agricultural products like fresh fruits and
vegetables, meat and poultry products. DTI is also maximizing
opportunities under existing preferential trade agreements with
ASEAN, China, Japan, South Korea, India, Australia and New
Zealand, India as well as with EFTA countries. We are also promoting
more products to the US and EU to expand utilization of their GSP
schemes.
Trade promotional efforts are also being done on the non-
traditional markets in Russia, Africa, Latin America and South Asia.
These markets are expected to experience high economic growths
and with their huge population can provide for alternative export
markets in the near future.
The DTI, together with other government agencies are already
trying to provide solutions to these issues, consistent with the
strategies laid out in the Philippine Export Development Plan
(PEDP). Notwithstanding, from the 2018 total export level of US$89
B, we remain confident that we are still on track in meeting our
total export targets to reach a range of US$ 122 to 130 B by 2022.
We expect a positive growth trajectory to set in in the subsequent
quarters.
www.dti.gov.ph