Philippine exports for the rest of the year will continue to grow at a steady pace, even if the country loses its trade privileges from the European Union, according to the Philippine Exporters Confederation Inc. (Philexport).
Philexport President Sergio R. Ortiz-Luis Jr. said the Philippines has not fully taken advantage of the EU’s Generalized System Preferences Plus (GSP+) scheme, which has been in place since December 2014.
“We have not really taken advantage of the [GSP+ scheme], because from what I understand, only garments would really benefit from it. But it seems it’s not being used, so there won’t be much of a difference [if it is scrapped],” Ortiz-Luis told the BusinessMirror.
While export receipts in the second quarter are usually “tempered”, Ortiz-Luis said he remains confident that shipments would post double-digit growth by the end of the year.
The National Economic and Development Authority (Neda) and its attached agency, the Philippine Statistics Authority (PSA), released data on the country’s trade performance last Friday, which showed that export receipts grew by 12.1 percent to $11.66 billion in April.
Neda Secretary Ernesto M. Pernia said the government is optimistic of the country’s trade performance for the rest of the year due to “thriving exports and trade linkages”, especially to Europe and East Asia. “For exports, East Asia and the EU remain the top destinations of our products, accounting for 62.3 percent of total export receipts,” Pernia said in a statement. Exports to EU and East Asia grew by 36 percent and 10 percent in April 2017, respectively.
“Despite global uncertainties, we remain upbeat that the country will sustain the strong performance of export and trade growth recorded in the first quarter,” he added. Philexport credited the increase in shipments to the EU to Europe’s economic recovery.
In April government data showed that sales of Philippine goods to Hong Kong (36.8 percent), China (26.4 percent), South Korea (18.9 percent) and Taiwan (26.4 percent) posted double-digit growth, while exports to Japan declined by 16.6 percent.
“We aim to deepen our engagement with our neighbors in the Asia-Pacific region to enhance trade and investment links,” Pernia said.
He noted the “positive contributions” of trade connections and cited China as an example, where merchandise exports increased by 27.7 percent from October 2016 to April 2017, compared with the 7.1-percent decline from January to September 2016. “Also worth noting is the tripling of exports to the United Arab Emirates [UAE] and India in April. This was the third month that receipts to UAE tripled, and the second month for India,” he added.
The Neda said exports to the UAE and India grew by 286.4 percent and 204.1 percent, respectively.
“We see an opportunity to strengthen bilateral ties with India, as it becomes a major player in the global economy. Their large consumer base can be an important market for Philippine products,” Pernia said. Earlier, Senate sources told the BusinessMirror President Duterte’s decision to reject grants from the EU also put at risk the future of Philippine companies that depend on the tariff-free privilege they are enjoying in exporting to Europe.
The GSP+ allows the Philippines to export 6,274 products to the EU duty-free.
The Philippines’s duty-free exports to the EU were worth around €1.6 billion ($1.78 billion) in 2016, according to EU delegation data.
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