Exporters are optimistic to sustain the growth trajectory the industry is currently experiencing citing support from the SB Corporation with the creation of emergency fund for freight costs and additional demand from the Christmas season.
Sergio Ortiz-Luis Jr. , president of Philippine Exporters Confederation Inc. (Philexport), said at the group’s 3rd Quarter General Membership Meeting, that the coming Christmas holiday is expected to help sustain the current growth trajectory. The exports sector is expected to grow 10 percent this year.
In his report at the virtual GMM, Ortiz-Luis also noted that SB Corp has developed an emergency fund from where exporters may draw funds to advance freight costs that have gone 300 percent to 500 percent more than the pre-pandemic levels.
“We hope that more and more international shipping lines will respond positively to the situation ahead of the holiday purchases,” he said.
Philexport has also facilitated the shipment of exports when individual firms could not get space in international vessels. It also continued to work with the Export Development Council to enable domestic shipping lines to come to their rescue. “Two of these shipping lines will in fact be sailing this month to the US where most of our pending goods are going,” Ortiz-Luis said adding that the solution to the global vessel space issue is not within its sole control.
Part of Philexpor’s continuing advocacies is to address the efficient and competitive production and movement of goods and services.
Despite the continuing battle against COVID-19 and the challenges of mobility, the country’s export numbers have been positive.
In July, the country’s total export sales climbed by 12.7 percent to $6.42 billion. All exported commodity groups registered positive growth rates during the period except for machinery and transport equipment, which logged a 5.4 percent decline. Coconut oil performed best among the groups with an annual 207.7% growth rate. China was back as the Philippines’ top major trading partner in July after being overtaken again by the United States in June.
Other major importers were Hong Kong, Japan, and Singapore. Meanwhile, the country’s overall imports grew 24 percent during the period at $9.71 billion, with $3.29 billion in July alone, up from $2.13 billion in July last year. The latest deficit is smaller than the $3.39 billion tallied this June.
The improved export performance even back in June moved the Cabinet level Development Budget Coordination Committee (DBCC) to upgrade its exports outlook for this year and next, pinning its hopes on a rebound in global trade as economies are lifting border restrictions.
The DBCC has increased its merchandise exports growth projection to 10 percent from an earlier forecast of eight percent due to the worldwide recovery in demand. Its services growth forecast rose to seven percent by 2022 from six percent 5 earlier due to the resumption of travel and tourism and improvement in business process outsourcing receipts.
Ortiz-Luis further that the export growth happened even as only less than half of the micro, small and medium enterprises (MSMEs) were fully operating amid the lockdown, based on a Department of Trade and Industry survey. The survey showed that 44 percent of 33,145 MSMEs have maintained full operations as of June. Majority or 46 percent have partial operations while the remaining 10 percent decided to close shop.
The June data also shared that 53.8 percent of the MSMEs reported a decline in sales and that some of the business owners who chose to fold up have shifted to other ventures that can potentially thrive amid the pandemic.
The DTI survey findings likewise confirmed that certain industries are struggling more compared to other sectors because of the restrictions imposed on them. These include tourism, recreation, entertainment, live performances and amusement parks as examples of these. On the other hand, we appreciate that the government has allowed full operations for manufacturing, export industry, business-process outsourcing and essential services sector.