Total PH exports expected to hit $100B by 2017
THE Department of Trade and Industry (DTI) is confident the country’s total exports will recover this year even after an 8.4-percent decline in merchandise exports in the first quarter, on the strength of robust services and electronics exports, as well as the recovery of the agriculture sector from the effects of El Niño.
Sennen Perlada, director of DTI’s Industry Promotions Group, said that total Philippine exports, which consist of 70 percent merchandise exports and 30 percent service exports, are poised for a “recovery” this year due to the strong electronics exports, services exports, as well as the benefits from the country’s transition to La Niña from the dry spell brought about the long running El Niño phenomenon.
“I’m still positive that there will be recovery [in exports]this year. Hopefully, El Niño will stop, then it’s La Niña’s turn. With the dry spell of El Niño our agriculture exports are the ones that suffered,” Perlada told reporters after a food and beverage forum on Wednesday.
The dry spell brought by the extended El Niño phenomenon has lasted for nearly two years, and has had a strong negative impact on the country’s agriculture sector.
“Again, services are still very strong. Electronics are still strong, and that should keep us above water,” he added.
The DTI director said the agency would retain is 8 percent to 9 percent target for total export growth in 2016, but will conduct a mid-year review of figures later this month.
“I think we will recover in terms of our exports. Our target is tougher, but we never know… Our services exports are really strong, but we’ll watch out for our merchandise exports. For 2016, I think we can still pull off a surprise,” Perlada said.
Perlada cited the export target set by the Philippine Export Development Plan (PEDP), which expects total exports to reach at least $100 billion by 2017, compared with about $86.6 billion in total exports in 2015.
Aside from the positive impact of strong electronics and services exports, and the transition to La Niña, the DTI director said the $100 billion target for next year is achievable, as global demand is expected to recover behind improving US and European economies, and the Philippines will be able to take full advantage of the respective generalized schemes of preferences (GSP) of the US and European Union (EU).
“Demand in US and Europe will recover. And the EU-GSP+ is getting traction. US is also positive as their economy recovers,” Perlada said.
Ff the $86.6 billion in total exports in 2015, merchandise exports accounted for $58.6 billion of the total while the rest or $28 billion were service exports.
Perlada said about $29 billion of last year’s merchandise exports were electronics exports. He noted that electronics exports reached an all-time high record of $31 billion in 2010.
He also said that the information technology and business process management (IT-BPM) sector accounted for the majority or $18 billion of the total $28 billion services exports last year.
Aside from the DTI’s 8-percent to 9-percent total export growth target this year, the state-run agency Development Budget Coordination Committee (DBCC) also has an export targets for 2016, although lower than DTI’s at 5 percent, after being revised downward from 6 percent earlier in the year.