The full-year export performance represented a recovery, albeit very slightly, from the 5.8-percent decrease posted for the first 11 months of 2015. Affected by weaker demand from Japan and China, the Philippines’ top two export markets, Philippine merchandise exports declined by 5.6 percent in 2015 compared to 2014.
Combined with the annualized services-export data, with an estimated growth rate of 5.2 percent, the projected total exports in 2015 showed a slower decline rate of 2.4 percent compared to 2014.
The decline in merchandise exports last year was reflective of the overall export downtrend in neighboring ASEAN countries as well as the bigger regional market in Asia. Save for Vietnam, Japan and Malaysia, many trade-oriented countries in Asia suffered lower export volumes and values in 2015.
Despite the regional downtrend in exports last year, the decline in merchandise exports in greater Asia and the Philippines has been decelerating, giving hope to many trade experts in Asia and the ASEAN that the export picture in the region is brightening.
Undersecretary Nora Terrado said, “The approval of the 2015-2017 Philippine Export Development Plan, a product of the close collaboration among government, the private sector, and academe, provides the direction and strategies to achieve merchandise and service export growth. We are especially keen on programs intended to tap new markets and new industries.”
Senen Perlada, director of the Export Marketing Bureau (EMB) of the Department of Trade and Industry (DTI) said, “We expect merchandise exports to get back on a growth track in 2016. Electronics exports can be expected to post moderate growth while non-electronics could snap back with the waning effects of El Nino on agricultural production and exports.”
“We also expect the robust services exports in 2015 to somewhat lift total exports to a lower single-digit figure,” he said. “We also see a deceleration of the decline in the country’s goods exports to continue until the trend shifts to a growth path this year.”
With the strategies for export growth and development laid out in the recently signed Philippine Export Development Plan (PEDP) 2015-2017, the government sees an uptick in the performance of the country’s exports in 2016.
Under the PEDP, merchandise exports are projected to grow between 5.4 percent and 8 percent this year and between 6.7 percent and 10 percent in 2017. Services exports are estimated to increase between 9 percent and 10.3 percent this year and between 9.9m percent and 12 percent in 2017. Total exports are seen to expand between 6.6 percent and 8.8 percent this year and between 7.7 percent and 10.6 percent in 2017.
The DTI, however, has expressed further optimism for exports to go beyond forecasted figures and has boldly declared adopting a stretch target growth range of 8% to 9 % for total exports in 2016.
The government is aligning its efforts in implementing the following strategies to grow exports this year and next year: design comprehensive packages of support for selected sectors; remove unnecessary regulatory impediments to the movement of goods and delivery of services; raise the productivity and competitiveness of Philippine enterprises; and upgrade the quality and standards of export.
The government shall also find ways to improve exporters access to trade finance; exploit opportunities presented by regional and preferential trading arrangements to expand market access within existing trade partners, explore new trade partners, and develop new export products; launch a well-coordinated, harmonized, and sufficiently funded export and investment promotion campaign; and enhance the innovative capacity of the export sector through an efficient system of national innovation.
On the weak export performance last year, the adverse effect of the sluggish economic performance in Japan and China, being major hubs of global production networks, had a contagion effect on the Philippines’ other major export markets such as Taiwan, South Korea, Singapore, and Thailand.
On the supply side, the lingering effects of the El Niño weather phenomenon also weighed down on the production and exports of agricultural and fishery products.
Towards the end of 2015, international organizations such as the Organization for Economic Cooperation and Development, World Trade Organization, and World Bank have already conceded that the full-year world trade in 2015 would be lower than what had been anticipated during the earlier part of the year.
The slower than expected growth in world trade – currently estimated at 2.8 percent instead of the earlier forecast of 3.3 percent can be attributed to: declining imports of China, Brazil, and other emerging economies; continuous fall in prices for oil and other primary commodities; and significant exchange-rate fluctuations globally. The impact of these factors have been reflected in volatile financial markets, a situation further exacerbated by the uncertainty in the monetary policy of the US.
The slack in world demand has been mainly attributed to the slowdown in the growth of China’s economy even as its officials have been advocating a shift from its export-based strategy to a more domestic consumption-based strategy. China’s economic growth slipped down to 6.8 percent during the last quarter of 2015, below the 6.9 percent and 7.4 percent in the third quarter of 2015 and 2014, respectively. China’s full-year gross domestic product growth in 2015 was 6.9 percent, the slowest since 1990. (END)