PH needs to boost do­mes­tic de­mand, ex­ports’ com­pet­i­tive­ness

Sun Star Bacolod - - Business -

WITH global growth likely to re­main slug­gish for the re­main­der of 2019, the govern­ment must ex­ert all ef­forts in boost­ing do­mes­tic de­mand and ex­ports’ com­pet­i­tive­ness to im­prove the Philip­pines’ trade per­for­mance, the Na­tional Eco­nomic and Devel­op­ment Au­thor­ity said in a state­ment on Wed­nes­day.

The Philip­pine Sta­tis­tics Au­thor­ity, an at­tached agency of NEDA, on Wed­nes­day re­ported that the coun­try’s to­tal mer­chan­dise trade con­tracted by 5.8 per­cent in June 2019 as the de­crease in mer­chan­dise im­ports (-10.4 per­cent) out­stripped the growth of ex­ports (1.5 per­cent).

Im­ports con­tin­ued its down­ward trend for three con­sec­u­tive months now, with raw ma­te­rial and in­ter­me­di­ate good, and con­sumer goods post­ing the big­gest de­cline at -16.5 per­cent and -12.8 per­cent, re­spec­tively.

The mod­er­ate re­cov­ery of ex­ports, on the other hand, con­tin­ued for the third con­sec­u­tive month.

In­creased sales of agrobased prod­ucts, min­er­als, and man­u­fac­tures com­pen­sated for the de­cline in out­ward ship­ments of pe­tro­leum prod­ucts and other agro-based prod­ucts.

So­cioe­co­nomic Plan­ning Sec­re­tary Ernesto Per­nia at­trib­uted the ex­ter­nal trade slow­down in part to the on­go­ing trade dis­putes, Brexit-re­lated un­cer­tain­ties, and ris­ing geopo­lit­i­cal ten­sions.

“De­spite the chal­leng­ing ex­ter­nal en­vi­ron­ment, the Philip­pines has shown re­silience in its trade per­for­mance. The Philip­pines is among the coun­tries in Asia with pos­i­tive ex­port growth,” he said.

In terms of ex­ports earn­ings, only Viet­nam and the Philip­pines reg­is­tered gains among se­lected Asian economies (China, In­dia, In­done­sia, Malaysia, Philip­pines, Sin­ga­pore, and Thai­land).

“The govern­ment must con­tinue pro­mot­ing the com­pet­i­tive­ness of the Philip­pine ex­ports by im­ple­ment­ing poli­cies and laws such as the Philip­pine In­no­va­tion Act. This will en­cour­age in­no­va­tion that will re­duce the cost of pro­duc­tion and el­e­vate the qual­ity of Philip­pine prod­ucts to meet in­ter­na­tional stan­dards,” the Cabi­net of­fi­cial added.

“How­ever, con­sid­er­ing the less op­ti­mistic global trade prospects, it is nec­es­sary to di­ver­sify mar­kets and boost do­mes­tic de­mand to com­pen­sate for the weak­ness of ex­ter­nal trade,” Per­nia said.

The Cabi­net of­fi­cial like­wise re­it­er­ated NEDA’S call to di­ver­sify prod­ucts and mar­kets by es­tab­lish­ing new trade re­la­tions and im­prov­ing ex­ist­ing ones with strate­gic part­ners.

“In light of the cur­rent trade spat be­tween Korea and Ja­pan, we need to com­plete the ne­go­ti­a­tions for the free trade agree­ment with South Korea and re­view the decade-old Philip­pines-ja­pan Eco­nomic Part­ner­ship Agree­ment to fur­ther ex­pand the coun­try’s ex­ports in both mar­kets,” said Per­nia.

“Im­por­tantly, the govern­ment has been fast-track­ing the im­ple­men­ta­tion of in­fra­struc­ture projects un­der the ‘Build, Build, Build’ pro­gram to en­hance trade fa­cil­i­ta­tion and pro­vide lo­gis­ti­cal sup­port to man­u­fac­tur­ers and ex­porters,” said Per­nia.

How­ever, only 11 (of 38 NEDA Board-ap­proved project pro­pos­als) out of the 75 in­fra­struc­ture flag­ship projects are now in the con­struc­tion phase. Fur­ther speed­ing up the roll-out of ap­proved projects and pro­cess­ing of those in the flag­ship list are called for to boost govern­ment spend­ing to pro­vide needed stim­u­lus to eco­nomic growth.

Per­nia urged the govern­ment to also be ready with counter-mea­sures against dis­rup­tions to con­struc­tion ac­tiv­i­ties that may oc­cur from likely un­fa­vor­able weather con­di­tions./pr

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