The president of the Philippine Exporters Confederation, Inc. (PHILEXPORT) pushed for the further expansion of export markets and products and the forging of more free trade agreements (FTAs) to address fluctuations in Philippine exports.
“The rise and fall in our export performance, particularly of goods, brings us back to the imperative of diversifying export portfolios and enhancing competitiveness in key sectors,” stressed Sergio R. Ortiz-Luis Jr. in his president’s report at PHILEXPORT’s second quarter general membership meeting.
His statement comes as merchandise exports rebounded in the first two months of the year after falling in 2023. Goods exports expanded by 9.1% to US$5.94 billion in January 2024 from the same period last year, recovering from a 0.5% fall in December.
The rebound in January also marked the first growth in goods exports since August 2023, according to William Tiu-Lim, PHILEXPORT trustee for the fresh and processed food sector, in his opening remarks at the meeting held April 16. It was the fastest growth in 14 months, driven mainly by a sharp increase in the sale of electronic products.
Merchandise exports further rose in February, recording a 15.7% growth and reversing the 18.3% decline in the same period last year, with electronics remaining the country’s top export.
However, despite reports of improved performance in January and February, Ortiz-Luis warned that the export horizon remains uncertain.
“(We) see a very fluid performance from our exports this year due to the ongoing trade war between the United States and China, among others factors. This means that the $143.4-billion target set in the Philippine Export Development Plan (PEDP) 2023-2028 is impossible to achieve this year; possibly in two-years’ time,” he said.
In view of this it is crucial for the Philippines to extend its export reach to more destinations, primarily through the pursuit of more FTAs, he continued.
Ortiz-Luis said the country’s exports stand to gain a big push with the ratification in September last year of the Philippines-Korea FTA. This agreement is expected to remove tariffs on most products from the two countries, providing greater market access in South Korea for Philippine bananas and processed pineapples.
The Philippines is also seen to make significant gains should it close an FTA with the European Union, the country’s fourth largest trade partner. The comprehensive trade deal now currently under discussion will include market access for goods, services, and investments; the removal of trade obstacles; and the protection of intellectual property rights including Geographical Indications.
However, Ortiz-Luis said caution should be exercised on provisions that could pose as trade barriers for a developing economy like the Philippines, such as the EU’s policy on de-carbonization of imports.
He likewise noted the potentials of the German market as the country has emerged as the world’s third largest economy after Japan slipped into recession last year.
“With a GDP of $4.5 trillion, Germany now sits behind the United States and China in terms of economic power, and narrowly leads Japan, which has a GDP of $4.2 trillion,” he said.
Nonetheless, he maintains that Japan as the fourth largest economy in the world continues to be a key partner for the Philippines.
“We are anticipating the positive outcome of the recent meeting among President Marcos, US President Joe Biden and Japanese Prime Minister Fumio Kishida last week that is expected to result into more jobs and more investments for Filipinos,” Ortiz-Luis said.
The executive also noted rising expectations as initial exploration for an FTA with the Middle East has started, saying a trade pact could remove some of the challenges facing seafood exports to the region.