May 06, 2020
The COVID-19 pandemic around the world and the resulting restrictions in production supply chains and global trade flow led to the decline in Philippine trade in March 2020. The Philippine Statistics Authority reported today that the country’s total merchandise trade dropped to US$11.44 billion – its lowest level in two years.
This trade performance is 25.7 percent lower than the US$15.40 billion recorded in the same month in the previous year. Both exports and imports registered declines of 24.9 percent and 26.2 percent, respectively.
“Merchandise trade may recover in 2021, but this will depend on how fast we can contain the spread of COVID-19 and mitigate its economic impact through government policies to support affected industries and workers,” Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua said.
“To improve the country’s trade performance, export manufacturers are encouraged to use digital technology and innovative approaches to continue operation and secure new markets. Firms will have to put in place alternative business processes that will become the new standards for engaging with clients, buyers, and suppliers,” he added.
Chua said that the export industry needs to be more responsive to the changes in consumer spending and redesign their product lines accordingly. Firms need to consider the needs and preferences of those working from home such as in terms of garments, personal care, health equipment, and household tools.
“We may see increased interest in advanced electronics and software for artificial intelligence, plastic products that serve as barrier for store fronts, and other protective equipment,” the Socioeconomic Planning chief said.
Chua also emphasized that policies that will expedite the sector’s recovery with the health of the population in mind will be critical to the country’s trade upturn.
“We are working closely with Congress to craft an economic recovery program that is attuned to the needs of affected industries, particularly our small and medium enterprises, which were forced to scale back or totally close operations due to this unprecedented health crisis. The program will include highly targeted tax incentives that are time bound, transparent, and performance-based to help us attract the right types of investments and help firms recover,” he said.
Chua added that support measures in the form of wage subsidies and guaranteed loans are being considered for critically-affected export and import industries, including the supply-chain. These support can help increase focus on research and development on new products, recalibration of production process, and development of innovative products, among others.