The Department of Trade and Industry (DTI) has downgraded its forecasts for exports due to weak global demand and lower production arising from the new coronavirus disease 2019 (COVID-19) pandemic.
In a statement yesterday, DTI Secretary Ramon Lopez said the new goal of the Philippine Export Development Plan is to reach $103.9 billion in exports by 2022, which is lower by 20 percent from the original forecast set under the 2018-2022 medium-term program.
Lopez said the new projection is also the fighting target for DTI as this is much higher than the $86 billion set by the Development Budget Coordination Committee.
According to the DTI forecasts, goods and services exports will shrink by 14.7 percent to $80.5 billion this year and will grow by 12.4 percent to $90.5 billion in 2021, and by 14.8 percent to $103.9 billion in 2022.
“It will be difficult to go achieve our pre-pandemic targets. Hence, we had to adjust our projections based also on the various inputs from industry stakeholders,” Lopez said, adding travel goods, garments, and wood-based industries were hit the most because of weak global demand and a decrease in production due to COVID-19 restrictions.
But Lopez remains optimistic new investments and build-up of export capacities will be realized due to the expected immediate passage of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act and the extension of the Bayanihan 2 We Recover As One Act, that will impact the export recovery in the next few years.
Lopez also said electronic products will continue to account for more than half of exports although the Semiconductor and Electronics Industries of the Philippines Inc. (SEIPI) assume a 7 percent contraction in 2020.
The group is optimistic to recover and grow 7 percent this year.
Lopez said SEIPI’s targets will strongly impact the overall exports of merchandise g oods.
Service exports, based on market intelligence forecasts, will grow 17.1 percent in 2020; and by 11 percent this year and by 14.8 percent in 2022.
These numbers take into account the forecast of the Information Technology and Business Process Association of the Philippines’ assumptions of a .5 percent decline in 2020 and 3.5 percent in growth 2021.
Services will be led by the information technology-business process management industry which will be driven by health information management, content development and the creatives industry.
The DTI also sees recovery in travel related goods and services sectors due to vaccine being made available in the next two years.
The DTI said four industries will have positive growth rates by the end of 2020: . vehicle auto parts (15.4 percent), other minerals—mostly copper and nickel ore (29.9 percent), other fruits and vegetables (8.6 percent), and basketwork (28.3 percent). Secretary Lopez said that the DTI will focus on growing winning industries with greater opportunities such as those in high value electronics, automotive and e-vehicles parts, processed food, minerals, other minerals, IT-BPM, creatives.
The DTI will also meet with stakeholders to refine sectoral targets and strategies.