The government will be prioritizing the safe opening of the economy, as well as connectivity and logistics reforms to bring down cost and improve competitiveness of the trade sector amid the COVID-19 pandemic, the National Economic and Development Authority said.
The Philippine Statistics Authority reported today that the country’s merchandise trade performance slightly declined in October 2020. Exports growth was -2.2 percent compared to an expansion of 2.9 percent in September 2020. Likewise, imports growth was -19.5 percent compared to -15.3 percent in September 2020.
Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua said that despite the declines, there are some positive takeaways from the trade data.
Merchandise exports to our leading regional trading partners such as China and ASEAN both grew in double digits. Moreover, capital goods imports increased in October compared to September 2020, suggesting that business activities have been responding to the government’s approach for a targeted and gradual reopening and increased mobility. However, Chua highlighted that more could be done to help accelerate our recovery.
“As traditional means of connecting buyers to suppliers are limited at the moment, the government and the private sector need to work together to harness digital platforms and alternative means to source from, and supply to, the country,” said Chua.
Chua said NEDA continues to partner with relevant agencies and the legislative branch to push forward proposed amendments to the Public Service Act to open opportunities and spur investments in critical infrastructure that can increase the productivity and competitiveness of exporters as well as enhance access to online platforms for businesses and government services.
“Improving communication infrastructure to encourage investments in digital solutions and services as well as logistics reforms, such as rationalizing the freight system, establishing strategic warehousing, and cold chain systems to bring down costs and improve the competitiveness of manufacturers and exporters, will play a key role in ensuring a rebound of the country’s trade sector,” he added.
Chua also emphasized that a calibrated and gradual resumption of businesses with strict implementation of health and safety protocols remain crucial in reinvigorating the economy.
“Fundamental to these efforts is the provision of safe and regular transport to allow for worker mobility,” the NEDA chief said.
Chua mentioned that improving the overall climate for businesses to foster entrepreneurship and competitiveness through the recent passage of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill will accelerate economic recovery by reducing our Corporate Income Tax (CIT) rate and restructuring the country’s fiscal incentives system.
A crucial feature of the law is for investment promotion agencies (IPA) to continue to promote and facilitate trade and investments under the supervision of the Fiscal Incentives Review Board (FIRB) ensuring alignment to a single fiscal incentives regime.
The bill also gives the government flexibility in granting fiscal and non-fiscal incentives that are performance-based, targeted, timebound, and transparent to attract investments resulting in significant job generation.
NEDA continues to pursue legislative reforms such as amendments to the Foreign Investment Act, Retail Trade Liberalization Act and the Public Service Act.
The implementation of these reforms is expected to remove obstacles to investments which ultimately create both the base for further expansion of productive activities and stimulate high and inclusive economic growth.