March 11, 2020
To ensure a quick rebound of the country’s external sector, the government should implement measures that streamline processes to facilitate trade amid the coronavirus (COVID-19) outbreak, the National Economic and Development Authority said.
The Philippine Statistics Authority reported that the country’s total merchandise trade grew by 4.1 percent, reaching USD15.1 billion in January 2020.
January’s trade performance is largely due to a rebound in exports, which grew by 9.7 percent, supported by strong expansions from manufactured goods, agro-based, mineral products, and forest products. The Philippines overtook all neighboring Asian countries in export growth in January 2020. Coming from a strong growth in December 2019, Philippine exports to major markets, particularly to Korea, Hong Kong, USA, Thailand, China and Japan, recorded positive growth.
Imports, meanwhile, broke its nine-month decline by registering 1.0 percent growth on account of higher inward shipments of mineral fuels and lubricant as well as capital goods.
There is, however, the looming slowdown in global demand partly due to the spread of COVID-19.
“The government should further intensify its trade efforts to minimize the impact from reduced external demand and manage timely recovery. This is while we are preventing the spread of coronavirus COVID-19 with continued vigilance and implementation of health measures,” said Socioeconomic Planning Secretary Ernesto M. Pernia.
He added that relevant government agencies should consider measures that would streamline procedures and facilitate trade, as well as reduce transactions costs.
“In consultation with the private sector, the government should ease implementation of some regulations that will allow firms to manage costs and provide financing or loan restructuring to micro and small enterprises whose operations may have already been affected,” said Pernia.
Pernia cited measures that were instituted to remove administrative constraints for the importation of agricultural products under Administrative Order No. 13, s. 2019. These include (a) streamlining procedures and requirements in the accreditation of importers and minimize the processing time of applications for importation; (b) providing exemption to traders that are already accredited from registration requirements; and (c) reducing transaction fees and cargo fees for a limited period. Pernia said relevant government agencies may institute similar measures.
The Cabinet official said that the Anti-Red Tape Authority may also play a crucial role in helping businesses lower their cost of production by fast-tracking the review of procedures of certain crucial agencies, such as the Food and Drug Administration of the Philippines, to allow the introduction of new and innovative products to the domestic and export markets.
Pernia added that the government, in coordination with exporters, can also facilitate the identification of new sources and markets as well as diversification of its products to manage vulnerabilities.
“In the longer term, emphasis must be placed on developing backward and forward linkages that will encourage production of raw materials and intermediate inputs – as well onward processing to finished products – in the domestic market to reduce reliance on foreign suppliers,” Pernia said.