PH has stronger export relations with non-Asean countries

The export relations of Philippine micro, small, and medium enterprises (MSMEs) with non-Asean partners exhibited better survival rate compared to those with Asean countries, according to a study recently published by state think tank Philippine Institute for Development Studies (PIDS).

Using a statistical method, authors and PIDS consultants Dr. George Manzano and Mark Edison Baustista mapped the “survival rate or duration of continuous exports” of products from Philippine MSMEs to selected member-countries in Asean, countries that have existing free trade agreements with the Philippines (such as Australia, New Zealand, and India), and East Asian nations like China, Japan, and South Korea. The researchers used three periods (first year, fourth year, and twelfth year) to analyze the results of their study.

Results showed that the survival rate of export products traded to Australia is high at 86 percent after year one, followed by Japan with 78 percent. This is in contrast to Philippine exports to Laos, which had the lowest survival rate at 38 percent after the initial year.

The study also found that a large number of trade partnerships failed during the first four years of export relations. But beyond these periods, the incidence of failure became less prevalent. An example cited by the authors are the exports of Philippine MSMEs to Viet Nam, which reached a survival rate of 58 percent after one year, but declined to only 38 percent after four years.

In terms of long-term survival rate, the authors noted that “Singapore achieved the highest with 47 percent after 15 years of trade relations, followed by Japan with 45 percent. Over time, export products to Cambodia and Lao had the lowest survival rate with 16 percent and 13 percent, respectively.”

For long-time trading partners of the Philippines like Japan, Thailand, and Malaysia, the survival rate was observed to be higher, with rates reaching up to 60 percent or higher.

However, the study revealed that in new markets such as Cambodia, Laos, and Myanmar, the export products of Philippine MSMEs had low survival rates, averaging 41 percent after year one. This implied that local firms are still struggling in looking for appropriate partners and in adapting to the market of new partner-countries. The longterm survival rates of Philippine export products to these countries were likewise low at only 16 percent.

Results showed that the survival rate of export products traded to Australia is high at 86 percent after year one, followed by Japan with 78 percent.