THE country’s total external trade in goods in March posted a double digit drop, as the coronavirus disease 2019 (COVID-19) pandemic resulted in restrictions in production supply chains and global trade flow worldwide, the National Economic and Development Authority (NEDA) said.
The Philippine Statistics Authority (PSA) reported yesterday the country’s total merchandise trade plunged to $11.44 billion, its lowest level in two years.
This trade performance is 25.7 percent lower than the $15.40 billion recorded in the same month the previous year.
Both exports and imports registered declines of 24.9 percent and 26.2 percent, respectively.
“Merchandise trade may recover in 2021, but this will depend on how fast we can contain the spread of COVID-19 and mitigate its economic impact through government policies to support affected industries and workers,” Karl Kendrick Chua, acting socioeconomic planning secretary, said in a statement yesterday.
“To improve the country’s trade performance, export manufacturers are encouraged to use digital technology and innovative approaches to continue operation and secure new markets. Firms will have to put in place alternative business processes that will become the new standards for engaging with clients, buyers, and suppliers,” he added.
The PSA reported the country’s total export sales in March 2020 amounted to $4.53 billion, a decrease of 24.9 percent from the $6.03 billion total export generated in March last year.
Total imported goods in March meanwhile amounted to $6.91 billion, also indicating a reduction of 26.2 percent from the value of imported goods during the same month in 2019, amounting to $9.37 billion, the agency said.
Thus, the PSA said the country’s balance of trade in goods in March 2020 posted a $2.38 billion deficit, which was lower by 28.6 percent than the $3.33 billion deficit in March 2019.
Chua said the export industry needs to be more responsive to the changes in consumer spending and redesign its product lines accordingly.
Firms need to consider the needs and preferences of those working from home such as in terms of garments, personal care, health equipment, and household tools.
“We may see increased interest in advanced electronics and software for artificial intelligence, plastic products that serve as barrier for store fronts, and other protective equipment,” the NEDA chief said.
Chua also emphasized that policies that will expedite the sector’s recovery with the health of the population in mind will be critical to the country’s trade upturn.
“We are working closely with Congress to craft an economic recovery program that is attuned to the needs of affected industries, particularly our small and medium enterprises, which were forced to scale back or totally close operations due to this unprecedented health crisis,” Chua said.
“The program will include highly targeted tax incentives that are time bound, transparent, and performance-based to help us attract the right types of investments and help firms recover,” he added.
Chua also said support measures in the form of wage subsidies and guaranteed loans are being considered for critically-affected export and import industries, including the supply chain.
These support can help increase focus on research and development on new products, recalibration of production process, and development of innovative products, among others.
