Services sector seen a drag on exports growth

Published March 2, 2019, 12:00 AM

by manilabulletin_admin

By Bernie Cahiles-Magkilat

Growth in services export is seen to put a drag in the country’s overall exports as competition in the BPO markets is becoming saturated aside from the negative impact of the tax reform measures.

Senen Perlada, director of the Export Marketing Bureau of the Department of Trade and Industry, told reporters the growth in export services was estimated at only 9 percent in 2018 missing the 15-18 percent growth target. This was a sharp drop from the 2017 growth of 19 percent.

Perlada blamed this on the global development as well as the TRAIN Law, which has discouraged the BPO firms to expand operations in the country.

Growth in merchandize exports for 2018 was also expected to decline by 2 percent in 2018 because of the weak global market.

Already, the electronics industry is looking of a flat growth of 0-3 percent growth in 2019.

As a result, some sectors have called already for the updating of the Philippine Exports Development Plan (PDEP).

But Perlada said he would not recommend any revision of growth targets.

Parlada, however, explained that despite the weak exports market the Philippines is still on track with its 2018-2022 exports target of between P122 billion-P130 billion level.

“We are still on track,” he said noting that from last year, “As far as the PDEP and Philippine Development Plan are concerned, we’re on target.”

In addition, he cited the robust domestic demand with various indirect exporters. Also, the services export is still positive even if the sector is also facing a big challenge.

To counter the downturn in exports, Perlada cited the need to improve quality of products and improve ease of doing business.