Exporters need to be more aggressive ahead of integration

Exporters are encouraged to be more aggressive, innovative and more informed of market trends in light of the Asean market integration.

Trade Undersecretary Ponciano C. Manalo made this call yesterday during the consultation workshop for the Philippine Export Development Plan for 2014-2016.

Amid the Asean market integration, Manalo said exporters “must think and trade Asean.”

“The AEC (Asean Economic Community) gives us an opportunity to be competitive and become what we want to be as an exporting country. We are now in the ‘sweet spot’ with a sustained high GDP growth and attractiveness to investors as a result of high credit ratings,” said Manalo.

Manalo cited the export industry contributing almost half of the country’s gross domestic product last year.

He cited last year’s export revenues which was at $77 billion—45.5 percent of which came from the industry’s goods and services sector.

“We are here today to develop targets and plans which will be presented to President Aquino by middle of this year for approval,” he said.

Once approved, the plan will become the road map for the export industry which forms part of the Philippine Development Plan.

Manalo said that with the Asean Economic Community going full blast next year, the country’s export industry is seen to remain a growth driver which means a well constructed plan in accordance with the regional and global market developments is critical.

“There’s much to be done and my challenge to you is to achieve at least 10 percent annual growth in the next three years starting this year,” said Manalo.

With revenues at $77 billion last year, Manalo is looking at a growth of $7 to $9 billion this year.
In 2013, the merchandise export grew at 3.6 percent while the services grew by 16.6 percent, 40 percent of export revenues came from the electronics sector.

Despite these growth, Manalo said that we should not be complacent but remain vigilant as we continue to tilt toward a more balanced trade.

Manalo said that from 2012 to 2013, the industry grew by 16.6 percent fueled mostly by electronics despite the sector shrinking by 10 percent last year.

“We need to recover the electronics sector. In the first two months, we saw the electronics sector grow by 22 percent. We want to see growth in the export industry and a lesser dependency to electronics sector as well. Thus we need to also develop other export products with high potential like the processed food, furniture, home furnishings, textile and mining in the next three years,” said Manalo.

To help achieve this, Manalo said the government will continue to implement domestic policy reforms that will support the industry.

REFORMS

Reforms include lowering cost of shipping and power; addressing the flaws in the implementation of the mandatory credit allocations for MSMEs; institutionalizing a competitive exchange rate; facilitating trade through Customs modernization; improving access to capacity building programs, education and technology; and, increasing government budget for export promotions.

Philexport president Apolinar G. Suarez said that in the old PEDP created three years ago, the target for this year is to double exports by 2016.

Suarez said that attainable and realistic goals should be set, in the realm of many concerns and regulations of the export and trading industry.

This however needs to be adjusted after the recession in 2009 affecting our major export markets like the United States and Europe.

“From the $98.5 billion goal for 2014 was adjusted to 82 billion dollars, while the 108.7 billion for 2015 was adjusted to 90.6 billion,” he said.

Dr. Joy Abrenica, an economist from the University of the Philippines School of Economics, pointed out that the Philippines is lagging, stating that the volume of export is small and growth rate is low in comparison to neighboring Asean countries.

“Philippine exporters are not doing better than neighboring competition,” Abrenica said.

She added that one reason is that Philippine export is concentrated on very few items and distributed in few markets. This leaves little room for diversity and products are usually exported to declining or shrinking markets.

To be able to be at par with competitors, Philippine exporters must go beyond the mere target, stating that markets should stay creative, innovative and informed.

The updated PEDP 2014-2016 should include strategies that will help the country achieve as much as our neighbors in the region are getting.

These are based on the discussions and suggestions by stakeholders around the country during the consultation workshops held in Manila, Davao and Cebu. / With UP Cebu Intern Niña Bianca Sayson