THE Export Development Council (EDC) had been forced anew to scale down expectations of growth for the sector, this time projecting export receipts to finally breach the $100-billion mark by 2019.
This new round of forecast downgrade was due to sluggish global trade coupled with domestic constraints to diversification of Philippine exports.
According to the executive summary of the Philippine Export Development Plan (PEDP), the growth rate for total exports is seen at zero percent to 3 percent this year, or a range of $86.9 billion to $89.5 billion, and 3 percent to 5 percent for 2017, or from $91.9 billion to $93.7 billion.
The EDC earlier set a more optimistic expectation of P92.1 billion in export revenues by end-2016 and $99 billion to $104 billion in 2017.
According to Philippine Exporters Confederation President Sergio R. Ortiz-Luis Jr., the dismal exports performance for the 17 months preceding the third quarter has affected targets.
“You have to remember this $100 billion is already a downgrade from the P120 billion before. We are not as optimistic, so we’re setting our sights to P100 billion. I can see it at 2018, but that’s a fighting target,” Ortiz-Luis Jr. clarified at the sidelines of the National Export Congress, where the PEDP summary was previewed.
Ortiz-Luis represents the private sector in the EDC, which is the public-private body that charts the policy direction and growth targets of the export sector.
In the previous administration, the EDC members, both in the government and in the private sector, were ambitiously forecasting exports to hit $120 billion by 2016. This was subsequently downgraded to $100 billion by 2016. This goal was moved to end-2017 and now further stretched to 2019.
“The global trade must improve. Economies around the world are concerned about the prolonged sluggish trade. If we manage to grow at 7 percent in 2018 onward, we can reach the $100 billion in 2019,” Trade Undersecretary Nora K. Terrado noted.
“But If we stay within the 3-percent to 5-percent growth range in the same period, maybe that $100 billion will be achieved by 2020, then the $120-billion mark by 2022,” she added.
Aside from the slowdown in global trade growth already noted by the World Trade Organization and the United Nations Conference on Trade and Development, the Philippines’s dilemma of export diversification has affected growth. The top 10 Philippine merchandise exports already accounts for two-thirds of total goods shipments. For the services exports, the picture is pretty much the same—the information technology-business process management industry takes up 80 percent to 85 percent of total services exports.
These numbers signal an over-reliance on too few goods and a handful of services for exports. The PEDP 2017-2019 containing final targets and the EDC’s package of strategies are seen to be released by the first quarter of 2017.