The National Economic and Development Authority (NEDA) said the favorable trade performance last November signaled that the country is well-positioned to take advantage of the improvements in external demand.
In a statement, Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua said that the rebound in export receipts is an indication that government’s efforts to reinvigorate businesses are now gaining traction.
After eight consecutive months of contraction, exports grew by 3.0 percent in November, the highest year-on-year expansion recorded since March, or when the country began imposing restrictions due to the pandemic.
The Philippines joined the ranks of other Asian economies that registered positive growth as exports to East Asia, particularly China, and Association of Southeast Asian Nations remained positive.
However, dampened consumer demand contributed to an 18.9 percent decrease in imports in November as inward shipments of raw materials, intermediate goods, and capital equipment continued to drop.
Driven by stronger exports, the contraction of the country’s merchandise trade performance eased to 10.6 percent in November from 11.9 percent in the previous month.
The government’s response to sustain the developments in the Philippine trade sector is crucial as it sets the direction for the country in 2021 and beyond,” Chua said.
Notably, the Senate’s passage of the Financial Institutions Strategic Transfer Act, and the Corporate Recovery and Tax Incentives for Enterprises Act last quarter signaled the government’s commitment to boosting the country’s business environment and financial sector.
In particular, FIST will help banks increase funds to lend to small businesses, while CREATE will stimulate the micro, small, and medium enterprises, promote more performance-based and targeted tax incentives, and help attract more investments in the country.
Chua urges both houses of Congress to work together to approve CREATE as soon as possible.
To boost trade recovery, Chua said that structural reforms are needed to encourage investments in the country, such as the amendments to the Public Service Act, Foreign Investment Act and the Retail Trade Liberalization Act.
“As economies resume normal operations, we must also work towards getting ahead of the competition and breaking down barriers to trade to ensure availability of raw materials to producers and spur the innovative and productive capacity of the sector,” the NEDA chief said.
On the domestic front, Chua recognized that the country also needs to undertake a review of the non-tariff measures in place that effectively limit access to critical raw materials resulting in higher costs to manufacturers and producers.
The NEDA chief added that online platforms such as TradeNet would be integral in enabling the Philippines to be at the forefront of digital solutions designed to reduce cost and facilitate trade.
“Placing this system as a backbone of trade transactions will not only ensure continuity of business activities, but will also help the government in its campaign to lessen face-to-face transactions, thereby reducing opportunities for corruption,” Chua said.