PH trade falls to two-year low in March
The country’s overseas trade decreased to its lowest level in two years as the coronavirus pandemic unleashes havoc on economies worldwide and in production supply chains, the National Economic and Development Authority (NEDA) said.
In a statement, Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua said yesterday that the country’s total merchandise trade dropped by 26 percent in March to $11.44 billion from $15.4 billion in the same month last year.
Both exports and imports during the month registered declines of 24.9 percent and 26.2 percent, respectively, data from the Philippine Statistics Authority showed.
“Merchandise trade may recover in 2021, but this will depend on how fast we can contain the spread of COVID-19 and mitigate its economic impact through government policies to support affected industries and workers,” Chua said.
To improve the country’s trade performance, Chua said export manufacturers are encouraged to use digital technology and innovative approaches to continue operation and secure new markets.
“Firms will have to put in place alternative business processes that will become the new standards for engaging with clients, buyers, and suppliers,” he pointed out.
Chua also said that the export industry needs to be more responsive to the changes in consumer spending and redesign their product lines accordingly.
Firms need to consider the needs and preferences of those working from home such as in terms of garments, personal care, health equipment, and household tools, the NEDA director general said.
“We may see increased interest in advanced electronics and software for artificial intelligence, plastic products that serve as barrier for store fronts, and other protective equipment,” Chua explained.
He also emphasized that policies that will expedite the sector’s recovery with the health of the population in mind will be critical to the country’s trade upturn.
For this reason, Chua said they are working closely with Congress to craft an economic recovery program that is attuned to the needs of affected industries, particularly the small and medium enterprises.
“The program will include highly targeted tax incentives that are time bound, transparent, and performance-based to help us attract the right types of investments and help firms recover,” Chua said.
Chua added that support measures in the form of wage subsidies and guaranteed loans are being considered for criticallyaffected export and import industries, including the supply-chain.
These support can help increase focus on research and development on new products, recalibration of production process, and development of innovative products, among others.