Amid the decline in the country’s total trade, the National Economic and Development Authority (Neda) said passing new laws will improve the country’s external trade performance.
On Tuesday the Philippine Statistics Authority (PSA) reported that the country’s total merchandise trade declined by 1 percent to $14.5 billion in April 2019, from $14.7 billion in April 2018.
The Neda said this was due to the 1.9-percent contraction of the imports bill, which offset the 0.4-percent increase in exports in April. “To further drive exports up, we are looking at continuously increasing market access for Philippine products, and reforms to improve productivity and lower production costs,” Socioeconomic Planning Secretary Ernesto M. Pernia said.
To support the export sector, Pernia said Congress must pass measures amending the Public Service Act, the Foreign Investment Act and the Retail Trade Act. He said the successful passage of the “Trabaho” bill will also modernize the country’s tax regime while streamlining the grant of fiscal incentives.
“With the passage of these reforms, we can leverage the Philippines’s attractiveness to both foreign and local investors. These investments can help our industry to improve production efficiency and product diversification,” Pernia added.
He said there is a need for “game-changing actions” in selected domestic regulations, such as streamlining the issuance of the Food and Drug Administration’s License to Operate and Certificate of Product Registration.
Other focus areas include the full implementation of the long-overdue National Single Window/TradeNet System, as well as the issuance of the long-awaited joint administrative order to improve the efficiency in the movement of cargoes and to regulate international shipping costs.
Due to the decline in imports, the country’s trade deficit contracted by 5.4 percent in April, the first time since September 2017, when the balance of trade in goods (BOTG) contracted by 13.2 percent.
The country’s trade deficit narrowed to $3.5 billion in April, from $3.7 billion a year ago. In the January-to-April period, the trade deficit slowed to 12.4 percent compared to 54.1 percent in the same period in 2018.
Neda said the decline in the value of imports was mainly due to reduced payments for raw materials and intermediate goods, which declined by 16.3 percent.
Data also showed that there was zero growth in capital goods imports and a slowdown in the growth of purchases of consumer goods to 7.6 percent in April, from 20.6 percent in March.
Exports in April rose by 0.4 percent to $5.506 billion from last year’s $5.481 billion. The positive exports growth in April can be attributed to the continued recovery of agro-based products, which recorded an increase of 31.1 percent in April, from 11.9 percent in March and the 2-percent uptick in the sales of manufactured goods in April.
Top export gainers during the period include fresh bananas, gold, machinery and transport equipment, coconut oil, other manufactured goods and electronic products.
Shipments to the United States expanded by 10.6 percent; China, 20.4 percent; and South Korea, 46.5 percent.