The Philippines’ domestic-oriented economy is expected to shield the country from the full impact of global slowdowns, Bangko Sentral ng Pilipinas (BSP) Deputy Governor Zeno Ronald R. Abenoja said.

Speaking at the BSP-Asian Development Bank (ADB) Association of Southeast Asian Nations (ASEAN) Economic Outlook webinar on Tuesday, Nov. 4, Abenoja highlighted that the central bank is closely monitoring global developments, including shifts in United States (US) trade policies and tariffs that could affect the Philippine economy.

On trade itself, Abenoja said, “Here the main impact will be on the slowdown in overall growth, and how that will affect the trade in goods sector.”

Abenoja stressed that the Philippines is characterized as a relatively domestic-oriented economy compared to others in the region, emphasizing that the country’s combined exports and imports account for less than 50 percent of the economy.

He also pointed out that the Philippines’ trade partners, particularly on the export side, are more diversified, noting that the BSP currently believes the impact of global slowdowns through this channel is “very limited.”

To boost intra-regional trade, Abenoja suggested strengthening ongoing efforts in trade facilitation, regulatory harmonization, information sharing, and improving mutual understanding of each other’s economies, noting that current initiatives in these areas already show promise.

The latest Philippine Statistics Authority (PSA) data showed that the country’s total external trade in goods in September reached $18.86 billion, a seven-percent increase from $17.62 billion in the same month last year.

PSA data showed that the Philippines’ merchandise exports reached $7.25 billion last September, up 15.9 percent from $6.26 billion in the same month last year. This followed a 5.5-percent annual increase in August and reversed the 7.6-percent decline recorded in September 2024.

PSA data also showed that the US was the top export market in September, with shipments valued at $1.11 billion, accounting for 15.3 percent of the country’s total exports that month.

Other major export destinations included Hong Kong ($1.1 billion, 15.1 percent of total), China ($959.19 million, 13.2 percent), Japan ($883.33 million, 12.2 percent), and the Netherlands ($325.78 million, 4.5 percent).

As for imports, PSA data showed that total imports last September reached $11.6 billion, marking a 2.1-percent increase from $11.36 billion a year ago. This followed a 0.3-percent annual decline in August and contrasted with a 10.1-percent rise in September 2024.

In terms of source countries, PSA data revealed that China remained the largest supplier of imports that month, with goods valued at $3.29 billion, accounting for 28.4 percent of total imports.

Other top import sources included South Korea ($1.06 billion, 9.1 percent of total), Japan ($935.07 million, 8.1 percent), Indonesia ($821.42 million, 7.1 percent), and the US ($728.88 million, 6.3 percent).

Abenoja also highlighted remittances as a key channel, noting that their largely altruistic nature has helped provide resilience to the Philippine economy amid global business cycle fluctuations—a trend observed over the past two to three decades.

“And so we continue to see at least three percent growth for remittances,” he added.

“BPO [business process outsourcing] revenues and tourism is also another channel. Here there are different forces—the technology, the adoption of artificial intelligence (AI), and then the possible reshoring of some of these services is also being talked about,” Abenoja said.

He added that the skills of the domestic labor force are considered a key factor in sustaining resilience in the BPO sector. The industry is adapting to address challenges posed by AI, with expectations that overall revenue and employment will continue to grow in the medium term, noting that industry projections indicate an annual growth of over five percent during this period.

(Ricardo M. Austria)