Local exporters told to step up to secure global foothold
Local exporters are continuously challenged to be highly competitive to gain traction in the global market, an export official said.
Philippine Exporters Confederation Inc-Cebu executive director Fred Escalona said competitiveness remains a challenge among local exporters, as the overall industry faces sluggish growth in recent months.
"What we need is to be competitive in price and quality of our export products but then we are challenged by the rising cost of raw materials and direct labor," Escalona told The FREEMAN yesterday.
While economists say the weak peso in general benefits the export industry because of potential higher dollar income, he said the trend has not been so "advantageous".
"The weaker peso is good for exporters, if there are orders. So far, the export performance in the first quarter of 2018 has been disappointing," the Philexport official pointed out.
Last May 25, the peso fell to 52.705 per dollar, its lowest since July 2006, and is down 5 percent this year, among the worst performing currencies in Asia.
"Thus, a weak peso in the current scenario may not be advantageous to exporters who will be losing market share in a very competitive market place," Escalona asserted.
The export official also explained the country’s balance of trade has been in a deficit situation for the last six months from October 2017 to March 2018.
"Clearly disadvantageous for a country with a weak currency," he said.
"If world oil prices continue to rise we will be in for a rough time as our global competitiveness rating will dip further," Escalona further pointed out.
Earlier, the National Economic and Development Authority said the government should actively intervene in making Philippine exports more attractive to the global market to boost the country’s trade.
The country’s total merchandise trade declined by 3.4 percent in March 2018, as exports contracted and imports barely grew at just 0.1 percent from last year.
The value of exports fell by 8.2 percent, after a 26.9 percent growth in March 2017, on account of lower revenues from sales of manufactured goods, agro-based products, minerals and petroleum products.
“As evident from the slowdown in trade figures of Asia, and even negative performance of the Philippines, China, and India in the latest exports figures, the Philippine government should double its efforts in marketing the country’s export products to international consumers,” Socioeconomic Planning Secretary Ernesto Pernia had noted.
On the other hand, imports continued its eighth month of expansion, but only by 0.1 percent as payments for mineral fuels and lubricants kept total imports afloat against declines in all other commodity groups.
Short-term measures to boost trade may include providing government support to promising export products whose demand is growing apace.
“This may include easing of government regulation, strengthened market intelligence gathering in partnership with the private sector, and maximizing the opportunities of trade agreements and economic groupings particularly within the Asian region,” Pernia said.
Exporters are likewise encouraged to innovate and improve export quality and that the Department of Trade and Industry should provide more access to testing, certification and accreditation facilities that will facilitate domestic compliance with international quality standards.
The government is looking to increased the share of Halal goods to 11 percent of total exports through the recent establishment of the National Halal Certification Scheme.
Pernia also highlighted the need to intensify the efforts of the country’s trade missions abroad, including business-matching initiatives in order to create new markets for Philippinemade goods.
“Exporters need to be provided with updated information that would enable them to tap countries with a huge market base to diversify their markets and decrease their vulnerabilities,” he said in an earlier NEDA statement.