Amid global challenges, government must continue supporting key and emerging export sectors to maintain the country’s trade growth, the National Economic and Development Authority said.
The Philippine Statistics Authority reported that the country’s total trade grew for the fifth consecutive month in August 2018 by 7.8 percent, reaching USD15.8 billion. Imports and exports grew by 11.0 percent and 3.1 percent, respectively.
“In order to sustain the country’s trade growth, targeted interventions that aim to mitigate vulnerabilities, increase production capacities, and level up coping strategies to global market trends and shocks must be put in place,” NEDA Officer-in-Charge (OIC) and Undersecretary Rosemarie G. Edillon said.
Exports continued its third month of gradual recovery during the month at 3.1 percent from a nearly flat performance of 0.3 percent the previous month. This was buoyed by electronic products, mineral products, and fruits and vegetables.
She said key strategies to improve the overall climate for export development are identified in the Philippine Export Development Plan 2018-2022. These include removing unnecessary regulatory impediments, raising productivity and competitiveness of Philippine enterprises, upgrading export quality and standards, improving access to trade finance, and enhancing export sectors’ innovative capacities.
“The immediate implementation of the Ease of Doing Business Act will also be vital in attracting competitive firms to enter the country’s exporting industry. The approval of the 11th Foreign Investment Negative List should further ease restriction on foreign investments and prop-up domestic economic activity,” Edillon said.
Meanwhile, growth of imports slowed to 11.0 percent from 31.6 percent in July 2018.
Imports growth softened because of weaker purchases of capital goods, raw materials & intermediate goods, and consumer goods.
Edillon said the total import bill is expected to accelerate further in the coming months driven by capital goods to support the Build, Build, Build program. Payments for oil will also be higher as international prices push upwards the costs of importation.
She added global growth is projected to remain steady at 3.7 percent in 2018 and 2019 based on the latest International Monetary Fund outlook as of October 2018. However, this is a downward revision from the July forecast of 3.9 percent for both 2018 and 2019 due to waning momentum in some advanced countries, among others.
“As trade tensions mount between the US and China, some manufacturing firms may seek to relocate their production, especially to Southeast Asia. This opens up opportunities for the Philippines to become a viable destination for export-oriented firms,” she said.
Edillon is OIC of NEDA while Socioeconomic Planning Secretary Ernesto M. Pernia is on official travel abroad.