The National Economic and Development Authority (NEDA) expects trade growth to gain momentum in the coming months as quarantine measures ease.
The Philippine Statistics Authority reported last July 10 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, NEDA said in a statement yesterday.
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,” Karl Kendrick Chua, acting socioeconomic planning secretary, said.
Manufactured goods, which accounts for almost 80 percent of total exports, is seen to gradually recover, NEDA said, as the latest results of the purchasing managers’ index for the Philippines rose from 40.1 in May to 49.7 in June 2020.
Notwithstanding the ongoing lockdown in Cebu where some of the electronics firms are located, NEDA said the Semiconductors and Electronics Industries in the Philippines Inc. also indicated a gradual pick-up in semiconductors exports in the coming months and projected a flat growth in 2020.
Chua said 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,” he said.
“In addition, we can attract more new technology and innovation through the passage of the Public Service Act, and provide performance-based, time-bound, and targeted incentives through the proposed Corporate Recovery and Tax Incentives for Enterprises bill.
These can all help improve the enabling environment for foreign investments and external demand,” Chua added.
