ALTERNATIVE fuels will help boost the country’s external trade performance, according to the National Economic and Development Authority (Neda).
On Friday, the Philippine Statistics Authority (PSA) said the country’s total external trade in goods contracted 5.3 percent to $14.54 billion in November 2019, from $15.35 billion in November 2018.
Data showed that exports and imports of goods continued to fall and posted a contraction of 0.7 percent and 8 percent, respectively, in the same month.
“The heightened conflict between the US and Iran, and its impact on oil prices could result in increased cost of production for domestic-oriented, as well as export-oriented firms,” Socioeconomic Planning Secretary Ernesto M. Pernia said.
Neda said exports declined due to lower shipments of agro-based products, petroleum products and the flat growth in manufactures.
The agency also said imports decreased because of lower shipments for unprocessed and semi-processed raw materials, including manufactured goods.
Pernia said the Philippines still imports most of its petroleum supply from the Middle East, particularly Saudi Arabia, United Arab Emirates and Kuwait.
This is despite indications that the country’s trade exposure to the leading trading partners in the Middle East is small relative to the country’s total trade.
However, the Philippines has increased its inward shipments of petroleum oil from other territories, particularly, South Korea, Malaysia, and Russia.
“…. The structure and pattern of imports of crude petroleum to the Philippines indicate that the country has diversified its source of crude petroleum in recent years, such that the level of vulnerability to supply shocks has been slightly reduced,” Pernia said.
In its sectoral plans and road maps, the Department of Energy identified a number of initiatives toward increasing the country’s energy resources.
These include geothermal, hydro, solar and wind, among others, which will substantially lessen the country’s dependence on petroleum.
Pernia added that on top of these initiatives on energy sources, the government should also continue developing industries and encouraging investments in key sectors to provide more employment opportunities for Filipinos.
“In the long term, strengthening the capability of the country to provide alternative fuels and tapping new and advanced energy technologies are effective steps to diversify and manage the country’s utilization of energy sources, as well as insulate the domestic economy from potential supply shocks that would have far-reaching ramifications,” said Pernia.
Pernia said support must also be extended to entrepreneurs to provide better and quality jobs that will entice professionals based abroad to relocate to the country even in the absence of conflict.
External trade
The country’s top export was still electronic products with total earnings worth $3.28 billion.
This amount, which accounted for 58.6 percent of the total exports in November 2019, went up by 1.4 percent from the $3.24 billion export receipt in November 2018.
Import bills of electronic products reached $2.44 billion, contributing the highest share of 27.3 percent to the total imports. Import of this commodity group declined by 5.8 percent, from $2.59 billion in November 2018.
The country’s top export market is Japan which accounted for 16.6 percent worth $930.79 million in November 2019. Exports to Japan grew by 4.9 percent, from $887.32 million in November 2018.
Other major export trading partners were the United States with export value of $890.06 million; Hong Kong, $776.57 million; People’s Republic of China, $696.48 million; and Singapore, $321.52 million.