PH exports seen hitting $240.5 billion in 2028

Published December 7, 2022, 4:52 PM

by Bernie Cahiles-Magkilat

The country’s exports could possibly reach $240.5 billion by 2028, more than double the $113-billion level expected this year, by lifting the land ownership ceiling for agricultural investors, attracting major global players, scaling up exports of primary products, and integration of all players to fill up value chain gaps.

Former Socioeconomic Planning Secretary Dr. Cielito Habito made this projection in a speech at the 2022 National Export Congress, as he showed a glimpse of how the new Philippine Export Development Plan (PEDP) will look like. The new PEDP, which sets the growth targets and strategies, is still being validated by the Department of Trade and Industry (DTI).

In his presentation “Target aggregate and sectoral export earnings, 2023-2028”, the former director general of the National Economic and Development Authority and now spearheading the think tank Brain Trust Inc., showed eight major sectors, such as electronics and electricals; agriculture and agri-based; transport products; home furnishings, wearables, fashion accessories and travel goods; minerals, IT-BPM; and chemicals comprising 88.5 percent of the total export revenue projection.

To achieve the $240.5 billion export level, Habito said his two foremost recommendations include the lifting of the land ownership ceiling only for big investors in agriculture to immediately scale up exports, and integration of government policies into one nation approach to be an exporting country.

“Fill those value chain gaps, ban export of raw nickel, ore and copper and do more value adding and work on them and integrate as a country a whole-of-nation approach,” said Habito noting that the country’s exports have been the laggard in ASEAN. He said the country has over one percent increase in exports growth while other ASEAN countries increased their exports by as much as 20 times over the past 20 years.

He presented data showing that the country’s cumulative merchandize exports over the past two decades reached only $68 billion. Habito said that the inability of the country to grow its exports mirrors its inability to attract big global manufacturers. The country’s cumulative foreign direct investments only hit $103 billion over the past two decades.

“Others are increasing (exports) in multiples but ours is just a fraction,” he said as he related the export performance to PEDP, which supposedly is a masterplan to push the country’s exports.

With that, Habito has called for a closer look of the PEDP strategy and interventions to support exports.

According to Habito, the PEDP should look at aspects that the country has control of. He said that local exporters have control over consumer preferences and what the buyers abroad like, such as complying with standards and conformance with specifications and requirements and branding.

Habito also said that the country’s exports can be influenced by preferential trading agreements. At present, the Philippines is only part of 10 free trade agreements but its ASEAN neighbors are part of as many as 27 FTAs.

Thus, he urged for the ratification of the Regional Comprehensive Economic Partnership (RCEP) to widen the reach of the country’s exports.

“Product diversification is also within our control,” he added.

He also urged for upskilling of labor, plugging value chain gaps and fixing coordination problems across value chains and govt agencies.

On the supply strategy, Habito said there is a need to attract more FDIs and improvement in infrastructure such as power, logistics and transport. There is also a need for access to financing.

In addition, he urged the government to implement measures that consolidate or clustering of small producers to achieve economies of scale.

Lastly, he said, there is a need to strengthen technology and innovation system especially for the 4th industrial revolution.