WHILE the Philippines saw an uptick in first quarter trading, local exporters are still warned of potential continued exposure to vulnerability amid the pandemic.
Philippine Exporters Confederation Inc. (Philexport) Chairman George T. Barcelon told the BusinessMirror the country’s rebound in trading is being threatened by the government’s Covid-19 response and supply chain concerns.
According to the Philippine Statistics Authority (PSA), exports grew by 7.6 percent to $17.56 billion in the first quarter. In March alone, export revenues improved by 31.6 percent to $6.68 billion.
“If there is any issue that may come into play [it] is…we are [a bit] behind the curve in having this mass inoculation,” Barcelon said.
“We still have limitations in our mobility of the working class. Those are the factors that may constrain our export growth,” he added.
In addition, Barcelon lamented that manufacturers of electronics—which comprise bulk of the country’s exports—cannot maximize their capacity due to raw materials shortages.
The Semiconductor and Electronics Industries in the Philippines Foundation Inc. earlier flagged the lack of imported semiconductor wafers, needed to produce integrated circuits.
The exporters have also been reeled from shipment delays—seen to reduce export revenues—amid the shortage of vessels due to container imbalance. Philexport earlier said such delays, which started in the last quarter of 2020, range from two weeks to one month.
The Supply Chain Management Association of the Philippines said this constraint in supply chain is projected even after the Christmas rush, which could affect the manufacturing sector and consumption of the country.
According to the recent report by the United Nations Conference on Trade and Development (Unctad), the Philippines received a score of 0.11 for export volatility, among the highest in the Southeast Asian region.
“Export volatility tracks export performance across the last six months to identify volatility patterns. A greater score implies higher export vulnerability,” Unctad explained.
Meanwhile, other neighbors with higher export volatility score are Thailand at 2.34; Myanmar, 0.38; and Laos, 0.23.
Singapore has the least export vulnerability in the region at 0.01, followed by Vietnam (0.02), Indonesia (0.04), Malaysia (0.09) and Cambodia (0.1).
No data was provided in the report for Brunei and Timor-Leste.
Export performance
Unctad gave the Philippines 0.51 in export performance for the fourth quarter of 2020, which is the median score among countries in the region. The report noted the score is a composite indicator including growth rates, performance against other countries and competitiveness.
The Philippines scored higher than Cambodia (0.35), Myanmar (0.37), Thailand (0.43) and Singapore (0.46). Meanwhile, Indonesia, Malaysia, Vietnam and Laos outperformed most in the region with 0.56, 0.56, 0.59 and 0.69, respectively.
The Philippines’s trade recovery is parallel with the global performance. Unctad noted that global trade was up by about 10 percent year-on-year in the first three months and improved by 4 percent from the previous quarter.
Much of the trade resilience was due to East Asian economies, whose early success in pandemic mitigation allowed them to rebound faster and to capitalize on booming global demand for Covid-19 related products.
Trade outlook
Unctad expects further growth in global trading this year, to be driven by East Asian economies.
It pegged the value of global trade in goods and services in the second quarter at $6.6 trillion. If realized, this will mark a “year-over-year increase of about 31 percent relative to the lowest point of 2020 and of about 3 percent to the pre-pandemic levels of 2019.”
For its full-year forecast, Unctad predicts 16-percent increase from the lowest points of last year, which are 19 percent for goods and 8 percent for services.
Still, the UN agency noted there are still uncertainties despite the upbeat outlook, which include “uneven economic recovery” and changes in consumer spending.
For the Philippines, Trade Secretary Ramon Lopez said at a Laging Handa briefing on Thursday that the electronics and information technology-business process management are a “big dollar generator” driving export revenues.
To boost the export industry, the Department of Trade and Industry chief said they continue to provide assistance and incentives to the local players.
“We continue to market our products abroad. We talk to international stakeholders,” he said, in addition to addressing concerns with cargo movements and availability of workers.
Read full article on BusinessMirror