July 14, 2020
Trade growth is expected to gain momentum in the coming months as quarantine measures ease, the National Economic and Development Authority said.
The Philippine Statistics Authority reported last July 10 that the country’s total merchandise trade registered a slower decline of 38.7 percent in May 2020, after a steep 59.5 percent decline in April 2020.
Merchandise exports declined by 35.6 percent but with notable improvements in agro-based, forest, and manufactured products.
Imports, meanwhile, fell by 40.6 percent but showed slower contractions in major commodity groupings, particularly capital goods, raw materials including chemicals and manufactured goods, and consumer goods.
“The slower decline in trade performance is a welcome indication that economic activity has started to pick up. This is due to the relaxation of quarantine measures in certain areas, the gradual reopening of business, and the restarting of production within the country and its trading partners,” said Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua.
Manufactured goods, which accounts for almost 80 percent of total exports, is seen to gradually recover as the latest results of the Purchasing Managers’ Index (PMI) for the Philippines rose from 40.1 in May to 49.7 in June 2020.
Notwithstanding the on-going lockdown in Cebu where some of the electronics firms are located, the Semiconductors and Electronics Industries in the Philippines, Inc. (SEIPI) also indicated a gradual pick-up in semiconductors exports in the coming months and projected a flat growth in 2020.
The NEDA chief said that given significant downside risks to global trade, the country needs to ramp up efforts to build a more competitive trade sector.
“We have made some notable improvements in the past decade. However, we need to capitalize on this and further improve infrastructure, logistics, productivity, and the whole manufacturing value chain in order bring down the cost of production and remain internationally competitive. In addition, we can attract more new technology and innovation through the passage of the Public Service Act, and provide performance-based, timebound, and targeted incentives through the proposed CREATE bill. These can all help improve the enabling environment for foreign investments and external demand,” Chua said.
NEDA is leading the updating of the Philippine Development Plan (PDP) 2017-2022, which aims for a healthy and resilient Philippines.
The updated PDP will highlight government efforts to re-calibrate and re-focus its strategies to address the economic impact of the COVID-19 pandemic. These strategies include building consumer and business confidence in the near term and enhancing economic resilience over the medium term.