$51-B export potential for PHL electronics gear cited

THE Philippines has $51 billion worth of unrealized export potential for electronic equipment alone, data from the International Trade Centre (ITC) platform showed.

Departmentoftradeandindustryexport Marketing Bureau (DTI-EMB) Director Bianca Pearl R. Sykimte told the Businessmirror that “Based on the export potential map, electronic equipment alone has an unrealized potential of $51 billion already.”

Sykimte noted this figure for one product classification already exceeded the country’s total unrealized export potential in 2021 which was at $49 billion.

Export potential “means we have the capability to export the product but we are not able to capture a larger share of the market—this refers to the growth-based and frictions-based potential,” she said.

According to the ITC export potential map, the products with greatest export potential from the Philippines to the World are Electronic equipment, Machinery, electricity, and Mineral resources.

ITC also noted that electronic equipment shows the “largest abso- lute difference” between potential and actual exports in value terms, leaving room to realize additional exports worth $51 billion.

The map noted that the country’s electronic equipment’s actual exports is at $47 billion.

ITC explained that when actual exports exceed potential exports, this can be driven by an exporter’s exceptional export performance in some markets while neglecting others.

On the other hand, the unrealized potential value “signals room for export growth if frictions, for example, in the form of regulations or buyer-seller mismatches, can be overcome.”

Sykimte explained the growthbased and frictions-based issues which should be looked into to realize the country’s export potential.

Frictions-based issues “are linked to a simple lack of market research, comprising missing information or difficulties to comply with [nontariff measures] NTMS, mismatch between products characteristics and consumer requirements and difficulties to find buyers.”

Sykimte said this is where the export marketing arm of DTI’S services is concentrated, acting to, for one, provide market and product intelligence to reduce information and search costs and addressing market concerns.

“This would already unlock a lot of unrealized potential for our exports. Frictions are specific to the exporter-importer product. Therefore this can be varied and identifying these frictions generally requires sector expertise and dialogue with businesses,” the DTIEMB Director said.

If the unrealized export potential arises from growth-based issues, she noted that this may come from the “projected economic growth of the Philippines and/or the demand growth in the target market.”

“These are opportunities expected to occur naturally if no major changes affect the sector, producer and market in question,” Sykimte explained further.

Benefiting from these opportunities mainly requires additional investments in production to ensure that the country meets the additional demand, she added.

Asked if unrealized export potential can lead to underutilization of free trade agreements (FTAS), Sykimte told this paper, “It can but cooperation mechanisms under FTAS also provide mechanisms that can help address or unlock the potential.”

She explained that these cooperation mechanisms are usually provisions related to “consultations and establishment of contact points to facilitate discussions on various issues.”

“There can also be initiatives to facilitate understanding of each other’s markets i.e. info sessions, business missions, etc.,” Sykimte also noted.

In 2021, the ITC’S findings noted that the Philippines has an unrealized export potential of $49 billion, with $20 billion caused by productmarket-specific frictions and $29 billion driven by expected GDP growth in the Philippines and its target markets.

“Realizing exports currently hampered by frictions requires identifying and addressing these frictions. To tap into growth-based export opportunities, it is necessary to ensure sufficient investment in additional production,” the 2021 ITC study explained.

ITC is a joint subsidiary organ of the World Trade Organization (WTO) and the United Nations through the United Nations Conference on Trade and Development (Unctad).