Minimal loss seen if PH loses EU-GSP Plus
The Philippine Exporters Confederation of the Philippines (PhilExport) has belittled the potential impact on the country’s exports in case the EU removes the duty-free privilege on 6,200 products under the EU-GSP Plus program.
PhilExport President Sergio OrtizLuis Jr. told reporters that the potential loss may only amount to $100 million to $200 million annually.
According to Ortiz-Luis, exports under the EU-GSP Plus account for 23 percent or $1.6 billion of the country’s total exports to EU. That means 77 percent does not need any GSP privilege.
“So, the majority of 77 percent has no GSP Plus only 23 percent could be affected but not all of the 23 percent may be affected,” he said.
His estimate was that only 10-15 percent or $100 million to $200 million annually of the $1.6 billion worth of exports could be lost although he noted that some Europeans were saying the Philippines could lose as much as 60 percent of its exports to the US.
“What I am saying is it is nothing fatal because my estimate is we could only lose $100 million to $200 million,” said Ortiz Luis.
According to Ortiz-Luis, the DTI even delayed the government’s application for the EU-GSP Plus by a year because there were 25 protocols, including human rights and environment, that some government agencies refused to sign because it was “costly for us if we agree to these things.”
“They impose this caveat to us by virtue of international agreements,” he added.
“We’re not to boast, but I said they should not make a big fuss out of it because I’d rather keep my pride if that is the only amount of losses we could incur. In the first place, not all Filipinos benefit from the GSP plus with 6,000 tariff lines only. How many of them are we using really,” he said adding that one winner among these items could be garments, but then there are only very few of them.
“We can easily recover the $200 million if we lose the EU-GSP Plus,” he added.
Thus, he said, he could not blame the President for getting mad at EU because even the issue of extra-judicial killings (EJK) has been thrown into the GSP Plus.
Department of Trade and Industry Undersecretary Ceferino Rodolfo said that 2,259 Filipino exporters have availed of the EU GSP Plus privilege. Full year utilization rate of the GSP+ in 2016 was 70.8 percent from 68.3 percent in 2015. But compared to the country’s overall exports, exports of products covered by the GSP+ still remain at $1.7 billion out of $6.6 billion total exports to EU.
With the good economy of the EU, Rodolfo expects more exports under the EU-GSP plus this year. EU Delegation Ambassador to the Philippines Franz Jessen expects exports this year to EU to hit $10 billion.
Meantime, Ortiz-Luis said they expect exports to grow double digit this year from 3 percent last year on a strong global economic recovery, basically the US and EU.
“We’ll probably hit near 8 percent if not double-digit, if we’re lucky,’’ he said.
The weaker peso against the dollar is just a bonus as it makes the country’s exports competitive but not strong enough to really contribute to growth in exports, he said. (BCM)