SME-friendly reforms seen boosting exports

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Exporters are still optimistic on the country’s exports because of the government’s push to adopt more micro, small and medium enterprises (MSMEs)-friendly reforms that can enable the sector to log in modest growth despite weak global demand.

Philippine Exporters Confederation Inc. (Philexport) President Sergio Ortiz-Luis Jr. said he hopes that some pronouncement of President Rodrigo Duterte can boost the growth of the export sector, particularly if streamlining business procedures, easing doing business, and promoting transparency are addressed.

“Already, certain pronouncements [from the government]are again making exporters bullish despite challenging global developments such as the Brexit or British exit from Europe, and the still recovering economies of the United States and China,” Ortiz-Luis said.

He stressed that the US and China — both experiencing downturns in economy — have adversely affected the country’s exports.


Data from Philippine Statistics Authority (PSA) indicated merchandise exports dropped by 6.6 percent in the first five months of the year, including a 3.8-percent decline in the month of May alone. It was the 14th month of decline for Philippine merchandise exports.

The decline in export figures was mostly due to the sluggish global economy and dryspell effects of the El Niño.

Recently, Ortiz-Luis predicted that total exports for this year — 70 percent merchandise exports and 30 percent service exports — would only grow by 3 percent, compared to the 8 percent to 9 percent stretch targets of the Department of Trade and Industry.

He said the 3-percent export outlook for 2016 is due to the negative growth of merchandise exports pulling down fast growth in electronics and services exports.

In terms of the impact of Brexit, Ortiz-Luis said he expects short-term trade diversion as Britain becomes isolated from European Union (EU) trade agreements the Philippines has signed.

“But we anticipate medium- to long-term benefits as we pursue bilateral trade agreement with Britain that may cover the same grounds we may have lost from this development,” the Philexport president said.

Ortiz-Luis also said the Duterte administration needs to build a solid foundation for the country’s growth to achieve fiscal space.

“That will allow the current government to maneuver the game-changing reforms it plans to implement,” he said.

Aside from its 10-point economic agenda, the Duterte administration has been vocal in pushing for more spending in infrastructure that will help both big and small businesses alike, as well as simplifying government processes.

The Department of Trade and Industry has vowed to improve services to aid MSMEs in the country, which account for 99.6 percent of total Philippine businesses.

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