THE Philippines faces prospects of slower growth this year because of external factors.
One such factor is the effect of Brexit on the world economy. With Brexit causing the European Union’s already sluggish economy to shrink further, Philippine exports to EU countries in 2016 may end up being less than half of last year’s.
A European freeze, notwithstanding the European countries not being as hot as the US or China or Japan, would also cool down their trade with other countries, including us.
At this point, it is already certain that Philippine exports growth this year will end up less than 2015’s.
The government has cut down its original export growth target of from 6.6 – 8.8 percent to 3 percent. This is a drop of more than 50 percent.
The export growth reductions were seen to be the result of Brexit.
Perhaps the UN Permanent Court of Arbitration’s decision in our favor in the complaint we filed against China over its takeover of our islets and reefs in the West Philippine Sea will also make China deal angrily with us in trade, commercial matters and tourism. So loss of exports to China will probably add to the export growth decline in 2016—and the coming few years.
The website of the Philippine Exporters Confederation includes on its lists of news items on July 14 the Philippine Star story headlined “Philippines likely to miss exports growth target this year.” The Times has a July 13 story, “Exports decline prompts focus on domestic market,” which contains the data in the Star story and a lot more.
That Star story by Richmond Mercurio has the lead: “The Philippines is unlikely to meet its exports growth target this year on account of the ‘Brexit’ event and the country’s continuing political tension with China, an export industry official said.”
The export industry official is Philippine Exporters Confederation, Inc. President Sergio Ortiz-Luis, Jr., who is quoted as saying:
“Lately we have been saying we can’t meet it so we’re looking at the lower end of the target as a six percent growth is very ambitious.”
“So we expect a three percent growth for exports this year. We’re already at half of the year and we’re still negative so for us to be able to beat the target, we have to grow 20 to 25 percent and there’s no way we can get that,” he added.
Ortiz-Luis, who is also the private-sector vice chairman of the Export Development Council, surmises that his lower growth figures are likely also to be the NEDA’s updated numbers if it decides to revise the earlier target.
As if it has come to the rescue in the old cowboys vs Indians movies, ADB announced that it was increasing its aid to the Philippines.
The story on Wednesday, July 13, by The Times’ Mayvelin U. Caraballo said, “The Asian Development Bank (ADB) has expanded the areas where it is ready to support the Duterte administration and affirmed its commitment to boost assistance to the Philippines going forward.”
ADB President Takehiko Nakao had met with President Rodrigo Duterte to discuss how the bank could support the new government in its efforts to achieve sustainable growth, reduce poverty, and increase transparency in government affairs.
Mr. Nakao commended Duterte for his early efforts to consult the private sector, civil society, and other partners to ensure a level playing field for all businesses, and uplift the lives of poor Filipinos that make up one-fourth of our country’s population.
ADB’s increased aid will surely help us ward off economic blows delivered by China.