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Wednesday, April 24, 2024

Export financing schemes stymie sector growth—PDP

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THE government aims to resolve constraints to export competitiveness including reviewing the “efficacy” of existing financing facilities to lower exporters’ costs, according to the Philippine Development Plan 2023-2028.

The Plan, published on Saturday, noted public export financing schemes are “fragmented, insufficient, or inadequately communicated.”

“Despite available financing facilities from the Development Bank of the Philippines, Land Bank of the Philippines, and the Small Business Corporation, a number of Philippine traders still resort to private financing,” the PDP 2023-2028 document read.

However, the Plan stressed that private financing carries higher costs and adds to the exporters’ cost disadvantage relative to their foreign competitors.

In fact, the PDP noted that all of the country’s direct regional competitors offer such facilities. For instance, the Export-Import Bank of Thailand, Export Credit Agency in Malaysia, Indonesia EXIM Bank, Export Credit Agency, and Export Credit-Vietnam Development Bank, which are all state-owned.

With this, the Plan noted that the lack of “buffers” to bridge finance their transactions often leads to “undue burden” that impacts their production capacities.

Another export issue that the government will look into is the country’s high-cost business environment due to high electricity costs and logistics cost relative to other Asean countries. The Plan noted that these costs must not be further weighed down by unnecessary regulatory costs.

Therefore, the PDP said the government will ensure “tight collaboration” with local government units (LGUs), adding that this will be a “special focus” of the Anti-Red Tape Authority (ARTA).

Moreover, the government said it will ensure “stricter timeframe” for resolving exporters’ issues to reduce exporters’ costs; the full implementation of the TradeNet platform; and “institutionalization” of a dedicated unit to oversee the implementation of the National Single Window.

The government said in the PDP that it will also review, identify, and recommend the removal of regulatory measures that have become “irrelevant, trade-restrictive, and costly or burdensome” in doing business.

As for increasing the market presence of Philippine goods and services, the government said it will “capacitate” exporters to increase their online presence and make use of digital platforms.

The digital platforms that could be leveraged, the PDP noted, include the ASEAN-wide Self-Certification Scheme; Asean Single Window; Asean Solutions for Investments, Services and Trade; Philippine National Trade Repository; and Asean Trade Repository.

According to the PDP, providing real-time market information is a “critical assistance” for the country’s exporters.

“The Tradeline Philippines will be revamped and given more resources to enable the platform to identify emerging products and market opportunities; better capture information on local suppliers and their capabilities; and create a dedicated space for market information sharing to and from trade and agricultural attaches, and diplomatic posts,” the PDP  2023-2028 document read.

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