NEDA: Phl trade sector needs overhaul

To counter external risks, Pernia underscored the country’s need to improve competitiveness through the institutionalization of policies that will streamline processes, facilitate and bring down the cost of doing business.

The National Economic and Development Authority (NEDA) calls on the government to explore alternative production strategies, participate in international trade fairs and implement consistent branding strategies to increase the presence of Philippine products in the global market.

The appeal came after the Philippine Statistics Authority (PSA) on Tuesday reported that the country’s total trade in October reached $15.9 billion from $15 billion in the previous month.

Official data from the state-run statistics agency showed that the slight improvement was brought about by the positive growth rate in exports, but was 6.7 percent lower compared to the same period in 2018.

Although the trade figures for October aligns well with the country’s overall GDP growth target of 6 to 7 percent for 2019, Pernia said the government still needs to rebrand the trade sector

“The modest recovery in the country’s trade figures for October 2019 backs the expectations that the export sector will remain relatively steady despite the global slowdown associated with the US-China trade war,” Socioeconomic Planning Secretary Ernesto Pernia said.

According to NEDA, the trade exports benefited from the increase in earnings from agro-based products, mainly fruits and vegetables; manufactured articles aided in drawing back the previous month’s decline to register a 0.1-percent gain during the referenced period.

Meanwhile, the PSA reported that the imports decelerated by 10.8 percent as reduced orders for raw materials and intermediate goods, capital goods, mineral fuels, and consumer goods weakened overall growth of imports.

“Possible downside risks, particularly the lingering vulnerabilities and spillovers associated with the trade tensions, need to be managed,” Pernia noted.

To counter external risks, Pernia underscored the country’s need to improve competitiveness through the institutionalization of policies that will streamline processes, facilitate and bring down the cost of doing business.

Pernia said these are important factors in making the country “more flexible to any eventualities that may impact the economy.”

“We need to take advantage of the country’s capacities on key products and building skills expertise and economies of scale to adapt and harness the benefits from emerging technologies like robotics and artificial intelligence,” the cabinet official added.

Pernia said the trade sector needs to climb a notch in the global value chain and transition into more value-adding and specialized production.

As such, refocusing market strategies towards capitalizing on design-centric and quality- driven products and employing niche marketing should be done for Philippine products to make its mark in international markets.

Meanwhile, Robert Dan Roces, chief economist at the Security Bank noted that the export growth was tempered by the adverse effects of the trade war to global trade.

However, he noted that there is still some semblance of a partial settlement to the trade war that could revive trade growth.

Roces said it can be expected that the electronics sector will be the first to bounce back in the event of a phase one agreement what with most of its elements dependent upon the global supply chain.

“We reiterate that government expenditure, alongside household spending, will prove critical in driving local growth to cope with a slowing global economy in the interim,” he said.

For the remaining two months of the year, Roces said exports are seen growing by 1 to 2 percent while imports are expected to turn to near positive territory on the back of seasonal stockpiling for the holiday season and the start of the new year.