By Bernie Cahiles-Magkilat
Growth in the country’s exports is expected to slowdown this year as the global epidemic caused by the 2019 novel coronavirus (nCoV) with epicenter in Wuhan, China is affecting global value chain.
SECOND PROPAK PHILIPPINES EXHIBITION OPENS AT WORLD TRADE CENTER – Trade and Industry Secretary Ramon M. Lopez (center) is shown with M. Gandi (left), Senior Vice President, Informa Market Asia, and Valenzuela Rep. Weslie Gatchalian (right) viewing the exhibits at the opening of Second ProPak Philippines at World Trade Center, Pasay City on February 5, 2020. (Photo by Ali Vicoy)
DTI Secretary Ramon M. Lopez told reporters covering the opening of PROPAK Philippines, the country’s premier processing packaging event, that the country’s exports are going to be affected only to the point of supply chain of inputs to production local industries.
He cited that several parts are being supplied from China. Delivery from the Chinese suppliers are delayed affecting local assemblers and manufacturers. For instance, Lopez said Japanese carmaker Honda has auto parts supplier from Wuhan.
Data from the Philippine Statistics Authority showed that China was the Philippines biggest supplier of imported goods with 22.9 percent share of total imports in November 2019. Imports from this country amounted to $2.05 billion, from $1.8 billion in November 2018. Other major trading partners were Japan with import value of $894.42 million; USA, $668.81 million; Thailand, $602.48 million; and South Korea, $568.43 million.
Lopez, however, said that based on computation by the National Economic and Development Authority the impact due to delays in delivery in terms of cost is still miniscule, but during his meeting with manufacturers said they are already thinking of looking at suppliers from other countries.
Most of those affected are companies with Asia production. China, which is a world’s major supplier of material inputs, is Philippines major trading partner.
But the nCoV is already a global epidemic that it expected to slowdown the world economy.
“Generically speaking there will be a slowdown with the global economy reeling because of disruption in exports and supply chain. So, we hope this to be over with as soon as possible,” he said.
The country’s total export sales in November 2019 already decreased by 0.7 percent to $5.6 billion from $5.64 billion in November 2018. This was due to the double-digit decline in the export sales of three of the top 10 major export commodities, namely, ignition wiring set and other wiring sets used in vehicles, aircrafts and ships (-23.7%); machinery and transport equipment (-21.7%); and electronic equipment and parts (-20.5%).
The Philippine Export Development Plan 2017-2022 target for exports of goods and services of $122 billion to $130.8 billion by 2022.
Meantime, Lopez said that a memorandum by the Bureau of Quarantine that inadvertently included quarantine procedures for cargoes/containers by ships coming from China has been rectified.
“We have an agreement already not to include cargoes but must not be coordinated with the Bureau of Quarantine, so the memo has been withdrawn yesterday,” he said noting the ships affected by the memo were those coming from China only and it was implemented yesterday morning only in the Manila ports.
“Even the Philippine Ports Authority disregarded the memo,” he said adding that containers and goods cannot be carriers of the virus, only human to human transmission.
Earlier this week, the PPA also said that ships calling in the Philippines more than 14 days after calling out at a port in China or its SARs shall be allowed to dock without restrictions in any PPA-operated ports.
For the ship’s crew, the PPA has banned the disembarkation of vessels from nCoV-HIT China and its Special Administrative Regions Macau and Hong Kong.