June 8, 2018
While the country’s trade recorded high growth, the National Economic and Development Authority stressed the need for the government to seize the benefits of “existing free trade agreements (FTAs) and forging new ties” to expand the Philippines’ market for exports.
The Philippine Statistics Authority reported that imports growth accelerated to 22.2 percent in April 2018 after a tepid increase of 0.3 percent in March 2018. That is attributed to an increase in inbound shipments of capital goods, raw materials and intermediate goods, consumer goods, and mineral fuels and lubricants.
Exports fell for a fourth consecutive month in April – by 8.5 percent year on year — dragged by a decline in non-electronic manufactured products (wood manufactures, machinery and transport equipment, chemicals, processed food & beverages, and furniture and fixtures) and agro-based products.
The decline was tempered by a 5.5 percent expansion in exports of electronic products, which accounted for 69.1 percent of total exports for the month. The increase in exports of electronic manufactures was led by faster growth of semiconductors (5.3%), compared with the 3.1 percent uptick recorded in the previous month, reflecting the global trend as chip sales worldwide continued to grow at a double-digit pace.
With the hefty increase in imports making up for exports’ soft performance, merchandise trade returned to positive growth at 8.8 percent in April 2018, a reversal from March’s 2.7 percent decline.
“The current turnout of imports is encouraging. But much has to be done to create an environment that is necessary for exporters to thrive. The signing into law of the Ease of Doing Business Act of 2018 is a step in the right direction,” Socioeconomic Planning Secretary Ernesto M. Pernia said.
He explained that the new law could bring down business costs, encourage wider participation among firms, and attract foreign investors—eventually boosting exports in the near to medium term.
In terms of trade facilitation, Pernia said that government efforts are also underway to better link up more agencies to TradeNet, the country’s link to the ASEAN National Single Window, which will enhance intraregional trade.
“Seizing the benefits of existing free trade agreements (FTAs) and forging new ties are equally important to expand the market for exports. To make FTAs more beneficial, the government needs to continue to encourage exporters to familiarize themselves with the proper tariff classification of products to find the lowest applicable tariffs as well as apply the rules of origin to avail of zero or lower tariff rates.”
“Enhancing trade relations with the country’s non-traditional partners would also contribute highly to the growth of the exports sector,” he added.